Question
1. Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six years
| 1. Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six years to maturity, whereas Bond Dave has 19 years to maturity. |
| If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) |
| Percentage change in price of Bond Sam | % |
| Percentage change in price of Bond Dave | % |
| If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave? (Round your answers to 2 decimal places. (e.g., 32.16)) |
| Percentage change in price of Bond Sam | % | |
| Percentage change in price of Bond Dave | % | |
| ||
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Quantum Economics And Finance
Authors: David Orrell
3rd Edition
1916081630, 978-1916081635
