Question
please answer it asap, i will upvote right then You work in the Treasury Department of Nitram Computers Ltd. The firm has the following bonds
please answer it asap, i will upvote right then
You work in the Treasury Department of Nitram Computers Ltd. The firm has the following bonds on issue. You have been asked to analyse this bond portfolio to ensure that all risk associated with the bonds are clearly understood so that they can be properly managed.
|
Bond | Coupon Rate | Years to Maturity |
---|---|---|
A | 5.7% | 5 |
B | 5.9% | 5 |
C | 5.9% | 7 |
D | 7.2% | 5 |
(Hint: You have all the information you need to answer this question. No calculations are required. You can answer based on theory alone because there is only one possible answer.)
|
Based on your analysis you have determined that if the market interest and hence the yields on all of these bonds go up by 1 basis point, the price of Bond B will fall by $0.56. By how much will the price of Bond C fall?
a.
$0.56
b.
$0.67
c.
$0.44
d.
$0.46
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