Question
1. Bond Features Maturity (years) = 9 Face Value = $1,000 Starting Interest Rate 4.89% Coupon Rate = 3% Coupon dates (Annual) If interest rates
1.
| Bond Features | |
| Maturity (years) = | 9 |
| Face Value = | $1,000 |
| Starting Interest Rate | 4.89% |
| Coupon Rate = | 3% |
| Coupon dates (Annual) |
If interest rates change from 4.89% to 5.48% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 5 ?
State your answer to the nearest penny (e.g., 48.45)
If there is a loss, state your answer with a negative sign (e.g., -52.30)
2.
| Bond Features | |
| Maturity (years) = | 7 |
| Face Value = | $1,000 |
| Starting Interest Rate | 4.04% |
| Coupon Rate = | 4% |
| Coupon dates (Annual) |
If interest rates change from 4.04% to 6.11% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 4 ?
State your answer to the nearest penny (e.g., 48.45)
If there is a loss, state your answer with a negative sign (e.g., -52.30)
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School Finance A Policy Perspective
Authors: Allan Odden, Lawrence Picus
5th Edition
0078110289, 978-0078110283
