Question
Both Bond Bill and Bond Ted have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 4 years to
Both Bond Bill and Bond Ted have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 4 years to maturity, whereas Bond Ted has 21 years to maturity. Both bonds have a par value of 1,000. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Percentage change in price | |
| Bond Bill | % |
| Bond Ted | % |
If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
| Percentage change in price | |
| Bond Bill | % |
| Bond Ted | % |
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States And The Reemergence Of Global Finance
Authors: Eric Helleiner
1st Edition
0801428599, 978-0801428593
