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You have 2 zero coupon bonds in your portfolio. One matures in 1 year and has a face value of $1,000. One matures in 30
You have 2 zero coupon bonds in your portfolio. One matures in 1 year and has a face value of $1,000. One matures in 30 years and has a face value of $1,000. The current market interest rate is 5%, expressed as an effective annual rate. What would happen to the value of your portfolio if interest rates increase to 7%? What is the dollar value change? What is the percentage change?
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