User Account

All Pages

What happens to the price of bond

Assignment Help Finance Basics
Reference no: EM133276004

Banks DIH recently issued three bonds with 8% coupon rates, all sell at par value of $1,000, to aid its expansion. Renewable Energy (RE) bond has a maturity of 4 years, Motor Vehicle (MV) bond has maturity of 8 years, and the Infrastructure (Infra) bond has maturity of 30 years.

  • What happens to the price of each bond if their yields increase to 9%? Show working.
  • What happens to the price of each if the yield decreases to 7%. Show working.
  • Using a graph, what do you conclude about the relationship between time to maturity and the sensitivity of bond prices to interest rates?

Reference no: EM133276004

Questions Cloud

Discuss how companies set their credit policies : In answering each question please cite your sources on each answers.
What is the speed of the water waves : The skipper estimates the distance between crests is 15 m. What is the speed of the water waves?
Explain ramifications the under performance : Explain the ramifications the under performance is currently having on the organization.
What determines stock market valuations : Research for academic studies, Business Finance Magazine, CFO Magazine, Strategic Finance Magazine, McKenzie Quarterly, and other financial management trade jo
What happens to the price of bond : Banks DIH recently issued three bonds with 8% coupon rates, all sell at par value of $1,000, to aid its expansion. Renewable Energy (RE) bond has a maturity of
Explain conditions a perfectly competitive firm shut down : Using diagrams, explain under what conditions a perfectly competitive firm will (i) shut down in the short run, and (ii) shut down in the long run
Assess quarterly patient perceptions on quality of care : As the Director of Marketing and Patient Relations, you are asked to assess quarterly patient perceptions on quality of care.
Explain how coding and billing specialists can locate : SCIENCE HCS/216 University of Phoenix Explain how coding and billing specialists can locate information on how to code and bill for these providers neurologist
Principal owing when the mortgage comes up for renewal : Peter and Mary are buying a house and will require a mortgage of $300,000. The posted rate is 4.80% (APR compounded semi-annually) for a 5-year term, repayable

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the project payback period if the initial cost

What is the project payback period if the initial cost is $1,625? (Enter 0 if the project never pays back. Round your answer to 2 decimal places, e.g., 32.16.)

  Increase in the automobile ratings by analyst

How do you reconcile lower revenue and lower profits with an increase in the automobile ratings by this analyst?

  What is the option time value

A stock's current price is 145.05. A put option with an exercise price of 120 and maturity of 3 months is currently priced at $ 28.83.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Explain the means test utilized by the program

Discuss the evolution of the program. Explain the means test utilized by the program. Discuss the role and relationship that exists among federal, state, and local governments in the administration of the program.

  Explain what is the maximum capital budget

Explain what is the maximum capital budget that can be adopted without adversely affecting stockholder wealth

  Negative ethical issues about biotechnology

Identify the negative ethical issues involved in biotechnology?

  Give a full and detail explantion on the beta

Give a full and detail explantion on the beta that you derive for a stock from performing regression on the market data is levered or unlevered?

  Some analysts in the agency argue that the annual real

the environmental protection agency of a county would like to preserve a piece of land as a wilderness area. the

  Compute the eurodollar futures rate

Compute the Eurodollar futures rates for a contract maturing at time 2 and compare them to the forward rate agreement rate for a contract maturing at time 3.

  Calculate the risk-free rate

The tax rate is 35% and the WACC is 16%. Calculate the risk-free rate.

  What is the intrinsic value

The company's debt and preferred stock has a total market value of $25,000 and there are 1,000 outstanding shares of common stock. What is the (per-share) intrinsic value of the company's common stock?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd