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provide calculation or financial calculation steps Consider three bonds with 5.90% coupon rates, all making annual coupon payments and all selling at face value, The
provide calculation or financial calculation steps
Consider three bonds with 5.90% coupon rates, all making annual coupon payments and all selling at face value, The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years. a. What will be the price of the 4 -year bond if its yield increases to 6.90% ? Note: Do not round intermediote calculations. Round your answer to 2 decimol ploces. b. What will be the price of the 8 year bond if its yeld increases to 6.90% ? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. What will be the price of the 30 -year bond if its yleld increases to 6.90% ? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. d. What will be the price of the 4 year bond if its yield decreases to 4.90% ? Note: Do not round intermediete colculations. Round your answer to 2 decimal places. e. What will be the price of the 8 -year bond if its yield decreases to 4.90% ? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. f. What will be the price of the 30 -year bond if its yleld decreases to 4,90% ? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 9. Comparing your answers to parts (a), (b), and (c). are long-term bonds more or less affected than short-term bonds by a rise in interest rates? h. Comparing your answers to parts (d). (e). and (f). are long-term bonds more or less affected than short-term bonds by a decline in interest rates Step by Step Solution
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