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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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