6.3 At an interest rate of 2.15%, the 3-year bond sells for $1,081.95. If the interest rate...
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6.3 At an interest rate of 2.15%, the 3-year bond sells for $1,081.95. If the interest rate jumps to 10%, the bond price falls to $875.66, a decline of 19.1%. The 30-year bond sells for $1,625.33 when the interest rate is 2.15%, but its price falls to $528.65 at an interest rate of 10%, a much larger percentage decline of 67.5%.
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Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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