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Posted on Jul 08, 2024

You find a bond with 28 years until maturity that has a coupon rate of 10.5 percent and a yield to maturity of 10 percent.

You find a bond with 28 years until maturity that has a coupon rate of 10.5 percent and a yield to maturity of 10 percent. Suppose the yield to maturity on the bond increases by .25 percent.

a.What is the new price of the bond using duration and using the bond pricing formula?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

b.Now suppose the original yield to maturity is increased by 1 percent. What is the new price of the bond?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

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