Suppose you want to compare the price sensitivity of two 10 -year bonds. Suppose the federal government announces that it will be running a smaller budget deficit than it anticipated, which results in an investor's required rate of return on a bond to decrease to 7%. Using this information, fill in the values for the percentage change in bond price, percentage change in k, and bond price elasticity for each bond in the table. Now suppose that instead the federal government announces that it will be running a larger budget deficit than it anticipated, which results in an investor's required rate of return on a bond to increase to 11%. Now suppose that instead the federal government announces that it will be running a larger budget deficit than it anticipated, which results in an investor's required rate of return on a bond to increase to 11%. Using this information, fill in the values for the percentage change in bond price, percentage change in k, and bond price elasticity for each bond in the table. Based on the calculations, it can be said that the bond price elasticity is between interest rate movements and bond price movements. in each scenario, which reflects relationship The price elasticity of bond A with a required rate of return of 7 percent can be interpreted as: A 1 percent increase in interest rates leads to a 0.704 percent increase in the price of the bond. A 1 percent increase in interest rates leads to a 0.620 percent decrease in the price of the bond. A 1 percent decrease in interest rates leads to a 0.704 percent decrease in the A 1 percent increase in interest rates leads to a 0.704 percent decrease in the Based on the calculations, it can be said that a bond with a low required rate of return is of return. he bond. le bond. price sensitive than a bond with a high required rate Suppose you want to compare the price sensitivity of two 10 -year bonds. Suppose the federal government announces that it will be running a smaller budget deficit than it anticipated, which results in an investor's required rate of return on a bond to decrease to 7%. Using this information, fill in the values for the percentage change in bond price, percentage change in k, and bond price elasticity for each bond in the table. Now suppose that instead the federal government announces that it will be running a larger budget deficit than it anticipated, which results in an investor's required rate of return on a bond to increase to 11%. Now suppose that instead the federal government announces that it will be running a larger budget deficit than it anticipated, which results in an investor's required rate of return on a bond to increase to 11%. Using this information, fill in the values for the percentage change in bond price, percentage change in k, and bond price elasticity for each bond in the table. Based on the calculations, it can be said that the bond price elasticity is between interest rate movements and bond price movements. in each scenario, which reflects relationship The price elasticity of bond A with a required rate of return of 7 percent can be interpreted as: A 1 percent increase in interest rates leads to a 0.704 percent increase in the price of the bond. A 1 percent increase in interest rates leads to a 0.620 percent decrease in the price of the bond. A 1 percent decrease in interest rates leads to a 0.704 percent decrease in the A 1 percent increase in interest rates leads to a 0.704 percent decrease in the Based on the calculations, it can be said that a bond with a low required rate of return is of return. he bond. le bond. price sensitive than a bond with a high required rate