Question
Chapter 6, 5 Both Bond Bill and Bond Ted have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has
Chapter 6, 5
Both Bond Bill and Bond Ted have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 4 years to maturity, whereas Bond Ted has 21 years to maturity. Both bonds have a par value of 1,000. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price
Bond Bill ;
Bond Ted ;
f rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price | |
Bond Bill: | % |
Bond Ted: | % |
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