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A bond trader purchased each of the following bomds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell
A bond trader purchased each of the following bomds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell to 7%.
Interest Rale Sensitility \begin{tabular}{l|l|} \hline Original yield to maturity at issue & 8.00% \\ Changed yeld to maturity immediately afer purchast & 7.00% \end{tabular} \begin{tabular}{l|r|} \hline \multicolumn{2}{|c|}{ TO-yaur zero coupon bond } \\ \hline Maturity term, N & 1 \\ \hline Coupon rate & 0.00: \\ \hline Par value, FV & $1,000.0 \\ PMT & 50.00 \\ \hline \end{tabular} Original price at issue Price with chariged yield to maturity Percentage change Oryinal price at issue Price with changed yeld to malurity. Original price at issue Price with changed yield to maturity Percentage change Formulas Percentage change \begin{tabular}{lr} \multicolumn{2}{|c|}{ so-year zaro coupan bond } \\ \hline Maturily term, N & 30 \\ \hline Coupon rate & 0.00% \\ \hline Par value, FV & $1,000.00 \\ \hline PMT & $0.00 \\ \hline \end{tabular} Original price at issue Price with changed yield to maturity Percentage change Formulas \begin{tabular}{|c|c|} \hline Original price at issue. & IN/A \\ \hline Price with changed yield to maturity & \\ \hline Percentage change & aNUA \\ \hline \multicolumn{2}{|c|}{ Aerpetuix 5100 annulat coypon } \\ \hline Annual coupon & $100 \\ \hline \end{tabular} \begin{tabular}{l} Formulas \\ \hline Original price at issue \\ Price wiah changed yield to maturity \\ Percentage change \end{tabular} Onginal price at issue Price with changed yield to malumty Percentage change What is the percentage change in price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Do not round intermediate calculations. Round answers to two decimal places.
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