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Consider the bonds shown below: Bond Issuer Par Value Coupon Rate Yield to Maturity Time to Maturity Bond Rating Shelby Specialty Pets $1,000 4.5% 4.75%
Consider the bonds shown below:
Bond Issuer | Par Value | Coupon Rate | Yield to Maturity | Time to Maturity | Bond Rating |
Shelby Specialty Pets | $1,000 | 4.5% | 4.75% | 10 years | BBB |
Tony's Plant-Based Meat | $1,000 | 5.2% | 5.10% | 3 years | B |
Kelly Cosmetics | $1,000 | 3.6% | 3.95% | 15 years | AA |
If interest rates in the economy fall by 75 basis points (0.75%), which of the following statements is CORRECT? Select all that apply.
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a) | The prices of Shelby's Specialty Pets and Kelly Cosmetics fall but the price of Tony's Meat rises. |
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b) | All bond prices fall. |
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c) | All bond prices rise. |
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d) | The prices of Shelby's Specialty Pets and Kelly Cosmetics rise but the price of Tony's Meat falls. |
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