Question
Both Bond Sam and Bond Dave have 10 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to
| Both Bond Sam and Bond Dave have 10 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to maturity, whereas Bond Dave has 17 years to maturity. |
| If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) |
| Percentage change in price of Bond Sam | % |
| Percentage change in price of Bond Dave | % |
| | |
| If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave? (Round your answers to 2 decimal places. (e.g., 32.16)) |
| Percentage change in price of Bond Sam | % |
| Percentage change in price of Bond Dave | % |
| | |
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Financial Intelligence For HR Professionals
Authors: Karen Berman, Joe Knight, John Case
1st Edition
1422119130, 978-1422119136
