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Task suppose you purchase a 30-year. SEK 10,000 par value, zero-coupon bond with a yield to maturity YTM) of 4 4%, You hold the bond
Task suppose you purchase a 30-year. SEK 10,000 par value, zero-coupon bond with a yield to maturity YTM) of 4 4%, You hold the bond for 6 years before selling it (a) What is the price of the bond when you buy it? Answer: The price of the bond is SEK (round to full SEK) (b) If the bond's yield to maturity drops by 1% when you sell it, what is the internal rate of return of your investment? Answer: If YTM drops by one percent when you sell the bond, IRR is (C) If the bond's yield to maturity drops by 2% when you sell it, what is the internal rate of return of your investment? Answer: If YTM drops by two percent when you sell the bond, IRR is (d) If the bond's yield to maturity increases by 1% when you sell it, what is the internal rate of return of your investment? Answer: if YTM increases by one percent when you sell the bond, IRR is Hint: I IRR is negative, enter - (minus sign) %, (round to one decimal) %, (round to one decimal) (round to one decimal)
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