What is the expected percentage price change of this bond

Assignment Help Financial Management

Reference no: EM131059754

Jackson Central has a 8-year, 8% semi-annual coupon bond. Jackson Central bond’s currently sells for 111. According to data, a 8-year, 8% Treasury bond sells for 125. As a bond investors who owns this bond, you envision that due to a rise in inflation, in three years, Treasury yields would increase by 1.5%. However, since the increase in inflation is due to an improving economy, the credit spread of Jackson Central would decrease by 90 basis points. What is the expected percentage price change of this bond?

Reference no: EM131059754

Questions Cloud

Effective communication and balanced judgement : A summary of all assumptions and estimates that you have made for your analysis - A Profit and Loss Statement for the first year of operations and Balance Sheet.

What is current value of one share if required rate return : The Sooner Fracers Inc. is a new firm in a rapidly growing industry. The company will pay its first annual dividend in the amount of $0.20 per share in four years. Afterwards, the company increases its annual dividend by 20% a year for the next four ..

Write a job description for a business analyst : Write all acceptance criteria for these two stories to be done. Write a Job Description for a Business Analyst to be recruited to join your project. In one page, list in dot point form the key differences between Agile and SDLC (waterfall) methods o..

Process costing is applicable to homogenous goods : Process Costing is applicable to homogenous goods that are produced in batches or continuous processes.

What is the expected percentage price change of this bond : Jackson Central has a 8-year, 8% semi-annual coupon bond. Jackson Central bond’s currently sells for 111. According to data, a 8-year, 8% Treasury bond sells for 125. As a bond investors who owns this bond, you envision that due to a rise in inflatio..

How long is the string : A 265 g ball is tied to a string. It is pulled to an angle of 6.8 ° and released to swing as a pendulum. A student with a stopwatch finds that 11 oscillations take 14 s. A) How long is the string?

Analyze alternatives make a recommendation on purchasing : Provide a comprehensive explanation of foreign exchange markets. Be sure to include examples of how forward markets and spot markets operate. Analyze the alternatives presented and make a recommendation on purchasing the Jaguar.

Ingore effect of taxes-mentioned objectives : INGORE effect of taxes. Additionally assume all dollar amounts and discount rates are REAL. Today at age 45, Ken is meeting his financial advisor, Barbie, to set up a retirement plan. Ken is currently making $12,000 per month. How much does he need t..

Speed of the waves on the string : The force stretching the D string on a certain guitar is171N.The string's linear mass density is0.006kg/m. What is the speed of the waves on the string?

User Account

All Pages