Question
Both Bond Bill and Bond Ted have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 3 years to
Both Bond Bill and Bond Ted have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If rates were to suddenly fall by 2 percent, what would be the percentage change in the price of Bond for Bill?
a. 1.8%
b.1.07%
c.0.92%
D.5.51%
what would be the percentage change in the price of Bond for Ted?
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Cases In Healthcare Finance
Authors: Louis Gapenski
5th Edition
1567936113, 978-1567936117
