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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.
BOND | PRICE @ 8% | PRICE @ 7% | PERCENTAGE CHANGING |
10-year, 10% annual coupon | |||
10-year zero | |||
5-year zero | |||
30-year zero | |||
$100 perpetuity |
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