Question
1. Bond maturity 4 Years initial interest rate = 4.00% Coupon Rate 3.00% Annual Coupon Face Value $1,000.00 Dollar Coupons $30.00 Given the information in
1.
| Bond maturity | 4 | Years | initial interest rate = | 4.00% | |
| Coupon Rate | 3.00% | Annual Coupon | |||
| Face Value | $1,000.00 | ||||
| Dollar Coupons | $30.00 | ||||
Given the information in the table, what is the price effect in year 3 if the interest rate changes from 4.00% to 6.00% ?
2.
| Bond maturity | 4 | Years | initial interest rate = | 5.00% | |
| Coupon Rate | 6.00% | Annual Coupon | |||
| Face Value | $1,000.00 | ||||
| Dollar Coupons | $60.00 | ||||
Given the information in the table, what is the price effect in year 2 if the interest rate changes from 5.00% to 4.00% ?
3.
| Bond maturity | 4 | Years | initial interest rate = | 4.00% | |
| Coupon Rate | 3.00% | Annual Coupon | |||
| Face Value | $1,000.00 | ||||
| Dollar Coupons | $30.00 | ||||
Given the information in the table, what is the reinvestment effect in year 3 if the interest rate changes from 4.00% to 5.00% ?
4.
| Bond maturity | 4 | Years | initial interest rate = | 3.00% | |
| Coupon Rate | 7.00% | Annual Coupon | |||
| Face Value | $1,000.00 | ||||
| Dollar Coupons | $70.00 | ||||
Given the information in the table, what is the reinvestment effect in year 3 if the interest rate changes from 3.00% to 4.00% ?
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The Business Of Finance
Authors: Withers Hartley 1867 1950
1st Edition
1313069299, 9781313069298
