Question
Choose U.S. Treasury bonds with different coupons and different maturities. Calculate how their prices would change if their yields to maturity increased by 1 percentage
Choose U.S. Treasury bonds with different coupons and different maturities. Calculate how their prices would change if their yields to maturity increased by 1 percentage point. Are long- or short-term bonds most affected by the change in yields? Are high- or low-coupon bonds most affected? (Assume annual coupon payments.) Please calculate based on the bonds below.
Coupon Bonds/NotesAnnual Coupon RateMaturityBid PriceAsk PriceClosing Price
MARKET BASED NOTE
2.00% Annual Coupon
2/28/21 Maturity
100.953 Bid Price
100.938 Ask Price
100.938 Closing Price
MARKET BASED BOND
3.13% Annual Coupon
11/15/41 Maturity
134.047 Bid Price
133.969 Ask Price
133.344 Closing Price
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