Question
Calculate the percentage change in the price over the course of a year for a bond with semi-annual coupon payments based on the following information:
Calculate the percentage change in the price over the course of a year for a bond with semi-annual coupon payments based on the following information:
Initial YTM = 6.875%
Coupon Rate = 4.5%
Time to maturity = 16 years
One year later: YTM = 8.85%
Answer choices:
Decrease by 18.17%
Decrease by 29.45%
Increase by 12.55%
Decrease by 16.73%
Not enough information
Increase by 11.98%
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Foundations Of Financial Markets And Institutions
Authors: Franco Modigliani, Frank J. Jones, Michael G. Ferri, Frank J. Fabozzi
3rd Edition
0130180793, 978-0130180797
