Question
Interest rate sensitivity An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and an 10% yield to maturity on
Interest rate sensitivity An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and an 10% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell and each then had a new YTM of 5%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Round your answers to the nearest cent or to two decimal places.
Price @ 10%. Price @ 5%. Percentage change
10-year, 10% annual coupon
10-year zero
5-year zero
30-year zero
$100 perpetuity
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