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7-7 INTEREST RATE SENSITIVITY An investor purchased the following five bonds. Each bond had a par value of $1,000 and an 8% yield to maturity
7-7 INTEREST RATE SENSITIVITY An investor purchased the following five bonds. Each bond had a par value of $1,000 and an 8% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 7%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table: Percentage Change Bond Price @8% Price @7% 10-year, 10% annual coupon 10-year zero 5-year zero 30-year zero $100 perpetuity
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