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Given the following information, what is the percentage change in the price of the bonds if interest rates suddenly rise by 2%? (Please show your
Given the following information, what is the percentage change in the price of the bonds if interest rates suddenly rise by 2%?
(Please show your work as I am attempting to work out similar problems in excel.)
| Wing Air Inc. | |
| Coupon rate | 7% |
| Settlement date | 1/1/2000 |
| Maturity date | 1/1/2002 |
| Face value | 1,000 |
| # of coupons per year | 2 |
| Airfoil, Inc. | |
| Coupon rate | 7% |
| Settlement date | 1/1/2000 |
| Maturity date | 1/1/2015 |
| Face value | 1,000 |
| # of coupons per year | 2 |
| Change in interest rate | 2% |
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