Question
Consider three bonds with 6.40% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of
Consider three bonds with 6.40% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years.
a.What will be the price of the 4-year bond if its yield increases to 7.40%? (Round answers to 2 decimal places)
b.What will be the price of the 8-year bond if its yield increases to 7.40%? (Round answers to 2 decimal places)
c.What will be the price of the 30-year bond if its yield increases to 7.40%? (Round answers to 2 decimal places)
d.What will be the price of the 4-year bond if its yield decreases to 5.40%? (Round answers to 2 decimal places)
e.What will be the price of the 8-year bond if its yield decreases to 5.40%? (Round answers to 2 decimal places)
f.What will be the price of the 30-year bond if its yield decreases to 5.40%? (Round answers to 2 decimal places)
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Project Management Accounting
Authors: Kevin R Callahan, Gary S Stetz, Lynne M Brooks
2nd Edition
1118078209, 9781118078204
