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Problem 4-16 Interest Rate Sensitivity A bond trader purchased each of the following bonds at a yield to maturity of 10%. Immediately after she purchased

Problem 4-16 Interest Rate Sensitivity

A bond trader purchased each of the following bonds at a yield to maturity of 10%. Immediately after she purchased the bonds, interest rates fell to 5%. 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. Round your answers 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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