Excel Online Structured Activity: Interest Rate Sensitivity A bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell to 7%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is the percentage change in the price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Fill in the following table. Do not round intermediate calculations. Round your answers to two decimal places. Price @ 8% Price @ 7% Percentage Change 10-year, 10% annual coupon 10-year zero 5-year zero 30-year zero $100 perpetuity Check My Work Reset Problem A Interest Rate Sensitivity min Original yield to maturity at issue Changed yield to maturity immediately after purchase 8.00% 7.00% 10-year zero coupon bond 10 Matur 10.00% $1,000.00 Maturity term, N Coupon rate Par value, FV PMT 0.00% $1,000.00 $0.00 10-year, 10% annual coupon bond 7 Maturity term, N 8 Coupon rate 9 Par value, FV 10 PMT 11 12 Original price at issue 13 Price with changed yield to maturity 14 Percentage change 15 16 Formulas 17 PMT Original price at issue 19 Price with changed yield to maturity Percentage change Original price at issue Price with changed yield to maturity Percentage change Formulas 18 #N/A #N/A #N/A #N/A Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A 5-year zero coupon bond 30-year zero coupon bond Maturity term, N Coupon rate Par value, FV 26 PMT 0.00% $1,000.00 $0.00 Maturity term, N Coupon rate Par value, FV PMT 0.00% $1,000.00 $0.00 Original price at issue 29 Price with changed yield to maturity 30 Percentage change 21 Original price at issue Price with changed yield to maturity Percentage change Formulas Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A Formulas Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A Perpetuity, $100 annual coupon Annual coupon $100 40 Original price at issue Price with changed yield to maturity Percentage change Formulas Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A Excel Online Structured Activity: Interest Rate Sensitivity A bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediately after she purchased the bonds, interest rates fell to 7%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is the percentage change in the price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Fill in the following table. Do not round intermediate calculations. Round your answers to two decimal places. Price @ 8% Price @ 7% Percentage Change 10-year, 10% annual coupon 10-year zero 5-year zero 30-year zero $100 perpetuity Check My Work Reset Problem A Interest Rate Sensitivity min Original yield to maturity at issue Changed yield to maturity immediately after purchase 8.00% 7.00% 10-year zero coupon bond 10 Matur 10.00% $1,000.00 Maturity term, N Coupon rate Par value, FV PMT 0.00% $1,000.00 $0.00 10-year, 10% annual coupon bond 7 Maturity term, N 8 Coupon rate 9 Par value, FV 10 PMT 11 12 Original price at issue 13 Price with changed yield to maturity 14 Percentage change 15 16 Formulas 17 PMT Original price at issue 19 Price with changed yield to maturity Percentage change Original price at issue Price with changed yield to maturity Percentage change Formulas 18 #N/A #N/A #N/A #N/A Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A 5-year zero coupon bond 30-year zero coupon bond Maturity term, N Coupon rate Par value, FV 26 PMT 0.00% $1,000.00 $0.00 Maturity term, N Coupon rate Par value, FV PMT 0.00% $1,000.00 $0.00 Original price at issue 29 Price with changed yield to maturity 30 Percentage change 21 Original price at issue Price with changed yield to maturity Percentage change Formulas Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A Formulas Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A Perpetuity, $100 annual coupon Annual coupon $100 40 Original price at issue Price with changed yield to maturity Percentage change Formulas Original price at issue Price with changed yield to maturity Percentage change #N/A #N/A #N/A
