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7. (Interest Rate Sensitivity) An investor purchased the following 4 bonds. Each bond had a face(par) value of $1,000 and an 6% yield to maturity
7. (Interest Rate Sensitivity) An investor purchased the following 4 bonds. Each bond had a face(par) value of $1,000 and an 6% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates changed, and each then had a new YTM (7% or 5%). What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table with your answers. Price Gain/Loss Bond Price @5% Price@7% (Percentage Change) 10-year, 6.5% annual coupon 30-year, 12% annual coupon 10-year, zero coupon 30-year,zero coupon
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