Question
Which bond would I use if I expected interest rates (ytm) to rise from 6% to 7%? (Pick one and show calculation as to why)
Which bond would I use if I expected interest rates (ytm) to rise from 6% to 7%? (Pick one and show calculation as to why)
A $1000 par value 30 year semi-annual zero coupon bond
A $1000 par value 2 year semi-annual zero coupon bond
A $1000 par value 30 year 6% semi-annual coupon bond
A $1000 par value 2 year 6% semi-annual coupon bond
Which bond would I use if I expected interest rates (ytm) to fall from 6% to 5%? (Pick one and show calculation as to why)
A $1000 par value 30 year semi-annual zero coupon bond
A $1000 par value 2 year semi-annual zero coupon bond
A $1000 par value 30 year 6% semi-annual coupon bond
A $1000 par value 2 year 6% semi-annual coupon bond
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Financial Management Principles And Practice
Authors: Timothy J. Gallagher, Joseph D. Andrew
3rd Edition
0131768824, 978-0131768826
