Question
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to
| Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 13 years to maturity. |
| If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam? | |
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| If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? | |
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| If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then? | |
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| If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then? |
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The Budget Building Book For Nonprofits
Authors: Murray Dropkin, Jim Halpin, Bill La Touche
2nd Edition
0787996033, 978-0787996031
