What is percentage price change of bond

Assignment Help Financial Management

Reference no: EM131890367

Bond J is a 4 percent coupon bond. Bond K is a 10 percent coupon bond. Both bonds have 7 years to maturity, make semiannual payments, and have a YTM of 8 percent.

Requirement 1:

(a) If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond J?

Answer Options: -20.35, -18.35, -20.33, 26.80, -19.35

(b) If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond K?

Answer Options: 23.31, -15.96, -17.94, -17.96, 26.64

Requirement 2:

(a) If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond J?

Answer Options: 1.00, -20.37, -37.18, 26.78, 26.76

(b) If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond K?

Answer Options: -17.98, 23.17, -36.32, -8.29, 23.39

Reference no: EM131890367

Questions Cloud

What is the expected yield of the debt : What is the value of debt? What is the expected yield of the debt? How does it compare with the riskfree rate?

Review your companys social media policy : Review your friend's inappropriate social media content. Review your company's social media policy. Create a one to two paragraph email.

Severe right av valve murmur : How would blood flow through the right side of the heart be affected if your patient has a severe right AV valve murmur?

Blood pressure in the brain : What would happen to blood pressure in the brain if the internal jugular vein did not change shape? And would this be dangerous if it did not, why or why not?

What is percentage price change of bond : Bond J is a 4 percent coupon bond. Bond K is a 10 percent coupon bond, what is the percentage price change of Bond J?

Activation of complement affect our immune responses : In what ways does activation of complement affect our immune responses and name 3? Why may complement not be activated in a person who has AIDS?

Calculate the required rate of return for hope inc : Calculate the required rate of return for Hope Inc., assuming that (1) investors expect a 2.0% rate of inflation in the future,

Draft two examples of formal company e-mails to employees : Acting as supervisor for a company of your choice, draft two examples of formal company e-mails to employees.

What are the roles of the mhc class : 1.What are the roles of the MHC Class 1 proteins and the MHC Class 2 proteins in specific immunity?

User Account

All Pages