Question
An 8% coupon bond with a YTM of 9% per annum has a price of $974.687; if the interest rate increases from 9% to 9.05%,
An 8% coupon bond with a YTM of 9% per annum has a price of $974.687; if the interest rate increases from 9% to 9.05%, the bond price will fall to ___________ giving a percentage change in price of _________. [Show detailed working step by step for this problem] Question options:
$971.335 giving a percentage price change of 0.135%
$971.335 giving a percentage price change of 0.127%
$973.446 giving a percentage price change of negative 0.135%
$973.446 giving a percentage price change of negative 0.127%
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Handbook Of The Equity Risk Premium
Authors: Rajnish Mehra
1st Edition
0444508996, 978-0444508997
