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28 a) Bond price sensitivity of bonds at different level of bond market rates, maturity, and coupon rates. Transfer your calculated results from [21.c] and

28
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a) Bond price sensitivity of bonds at different level of bond market rates, maturity, and coupon rates. Transfer your calculated results from [21.c] and [23.c] to the following table: b) From above table, compare and comment on the bond price sensitivity of bonds with a 1% change in market rate for bonds with a low initial market rate [5%4%] versus that of a much higher initial market rate [11%12%] against bonds with different levels of maturity and coupon rates. Hint seo lecturo notas on "Praporties al Bond Duration": Axt you response below: The following bond price sensitivity is shown with bonds with a 1% change in market rate and a range of maturity and coupon rates. Short-term bonds are less sensitive to price fluctuations than long-term bonds. Bonds with higher coupon rates are more susceptible to price movements than those with lower coupon rates. Remember, bond price sensidvity to changing bond market ratos, l.e. potential Interest Rate R/sk, are influenced by these three bond characteristics: Maturity, Coupon Rate, Initial (1.e. current) Market Rate of bond. These three factors are conveniontly captured as a single number in Bond Duration measure. i.e. Duration is an approximate Indicator of potential Interest Rate Risk. a) Bond price sensitivity of bonds at different level of bond market rates, maturity, and coupon rates. Transfer your calculated results from [21.c] and [23.c] to the following table: b) From above table, compare and comment on the bond price sensitivity of bonds with a 1% change in market rate for bonds with a low initial market rate [5%4%] versus that of a much higher initial market rate [11%12%] against bonds with different levels of maturity and coupon rates. Hint seo lecturo notas on "Praporties al Bond Duration": Axt you response below: The following bond price sensitivity is shown with bonds with a 1% change in market rate and a range of maturity and coupon rates. Short-term bonds are less sensitive to price fluctuations than long-term bonds. Bonds with higher coupon rates are more susceptible to price movements than those with lower coupon rates. Remember, bond price sensidvity to changing bond market ratos, l.e. potential Interest Rate R/sk, are influenced by these three bond characteristics: Maturity, Coupon Rate, Initial (1.e. current) Market Rate of bond. These three factors are conveniontly captured as a single number in Bond Duration measure. i.e. Duration is an approximate Indicator of potential Interest Rate Risk

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