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A bond trader purchased each of the following bonds at a yield to maturity of 10%. Immediately after she purchased the bonds, interest rates fell
A bond trader purchased each of the following bonds at a yield to maturity of 10%. Immediately after she purchased the bonds, interest rates fell to 5%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is the percentage change in the price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Fill in the following table. Do not round intermediate calculations. Round your answers to two decimal places. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|l|}{ Interest Rate Sensitivity } \\ \hline Original yield to maturity at issue & 10.00% & & \\ \hline Changed yield to maturity immediately after purchase & 5.00% & & \\ \hline \multicolumn{2}{|c|}{ 10-year, 10% annual coupon bond } & \multicolumn{2}{|c|}{ 10-year zero coupon bond } \\ \hline Maturity term, N & 10 & Maturity term, N & 10 \\ \hline Coupon rate & 10.00% & Coupon rate & 0.00% \\ \hline Par value, FV & $1,000.00 & Par value, FV & $1,000.00 \\ \hline PMT & & PMT & $0.00 \\ \hline Original price at issue & & Original price at issue & \\ \hline Price with changed yield to maturity & & Price with changed yield to maturity & \\ \hline Percentage change & & Percentage change & \\ \hline \multicolumn{2}{|l|}{ Formulas } & \multicolumn{2}{|c|}{ Formulas } \\ \hline PMT & \#N/A & & \\ \hline Original price at issue & \#N/A & Original price at issue & \#N/A \\ \hline Price with changed yield to maturity & #N/A & Price with changed yield to maturity & \#N/A \\ \hline Percentage change & \#N/A & Percentage change & #N/A \\ \hline \multicolumn{2}{|l|}{ 5-year zero coupon bond } & \multicolumn{2}{|c|}{ 30-year zero coupon bond } \\ \hline Maturity term, N & 5 & Maturity term, N & 30 \\ \hline Coupon rate & 0.00% & Coupon rate & 0.00% \\ \hline Par value, FV & $1,000.00 & Par value, FV & $1,000.00 \\ \hline PMT & $0.00 & PMT & $0.00 \\ \hline Original price at issue & & Original price at issue & \\ \hline Price with changed yield to maturity & & Price with changed yield to maturity & \\ \hline Percentage change & & Percentage change & \\ \hline \multicolumn{2}{|l|}{ Formulas } & \multicolumn{2}{|c|}{ Formulas } \\ \hline Original price at issue & \#N/A & Original price at issue & \#N/A \\ \hline Price with changed yield to maturity & #N/A & Price with changed yield to maturity & #N/A \\ \hline Percentage change & \#N/A & Percentage change & \#N/A \\ \hline \multicolumn{2}{|c|}{ Perpetuity, $100 annual coupon } & & \\ \hline Annual coupon & $100 & & \\ \hline \multicolumn{4}{|l|}{ Original price at issue } \\ \hline \multicolumn{4}{|l|}{ Price with changed yield to maturity } \\ \hline \multicolumn{4}{|l|}{ Percentage change } \\ \hline \multicolumn{4}{|l|}{ Formulas } \\ \hline Original price at issue & #N/A & & \\ \hline Price with changed yield to maturity & #N/A & & \\ \hline Percentage change & \#N/A & & \\ \hline \end{tabular}
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