Question
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 16 years to maturity.
a) If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam?
b) If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Dave?
c) If rates were to suddenly fall by 5 percent instead, what would the percentage change in the price of Bond Sam be then?
d) If rates were to suddenly fall by 5 percent instead, what would the percentage change in the price of Bond Dave be then?
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Full IFRS And IFRS For SMEs Adoption By Private Firms Empirical Evidence On Country Level
Authors: Maximilian Saucke
1st Edition
363166298X,3653055318
