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A US government bond 20-year bond has a coupon rate of 3% and a face value of $1,000. Assume that the interest rate on similar
A US government bond 20-year bond has a coupon rate of 3% and a face value of $1,000. Assume that the interest rate on similar bonds rises from 3% to 5% What is the expected change in the bond price due to the increase in the interest rate (in percentage)? You may assume that the bond's price equals its PV and that the interest rate on similar bonds is the appropriate discount rate (make sure you understand why these are reasonable assumptions). See the hint for further instructions. A US government bond 20 -year bond has a coupon rete of 25 and a face value of $1000 Assume that the intecest rate on y midar bonds rises from ax to 58 What is the expected change in the bond price due to the inctease in the interest rate in percemages? You moy assume thot the bono's price equals its PV and that the interest rate an simalar bonds is the aporopisate discount tate fmave sure you understand why thesa are reasanable essumpions). See the fint for further instruction
A US government bond 20-year bond has a coupon rate of 3% and a face value of $1,000. Assume that the interest rate on similar bonds rises from 3% to 5% What is the expected change in the bond price due to the increase in the interest rate (in percentage)? You may assume that the bond's price equals its PV and that the interest rate on similar bonds is the appropriate discount rate (make sure you understand why these are reasonable assumptions). See the hint for further instructions.
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