Question
Both Bill and Ted have 8% coupon bonds that make semiannual payments and are priced at par. Bills bond has 3 years to maturity and
Both Bill and Ted have 8% coupon bonds that make semiannual payments and are priced at par. Bills bond has 3 years to maturity and Teds bond has 20 years to maturity. If current interest rates fall by 3%,
a) what is the percentage change in the price of Bill's Bond?
b) what is the percentage change in the price of Ted's Bond?
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Contemporary Economics An Applications Approach
Authors: Robert Carbaugh
8th Edition
1138652199, 978-1138652194
