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(5-16) Interest Rate Sensitivity A bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediately after she purchased the

(5-16)

Interest Rate Sensitivity

A bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell to 7%. What is the percentage change in the price of each bond after the decline in interest rates? Fill in the following table: NOTE: the correct answers are provided under the percantage change colomn However I need all work shown to get the percentage change answer thanks!

price at 8% price @7% percentage change
10 yr 10% annual coupon 6.75
10 yr zero 9.75
5 year zero 4.76
30 year zero 32.19
perpetuity of $100 annual coupon 14.29

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