Question
You own a 15-year bond and a 20-year bond, both of which are non-callable bond and pay a coupon of 8%.What is true about the
You own a 15-year bond and a 20-year bond, both of which are non-callable bond and pay a coupon of 8%.What is true about the change in the value of your bonds if the interest rate rises from 8% to 11%?
The value of the 20-yr bond will decrease by $23 more than the 15-yr bond
The value of the 20-yr bond will decrease by $11 more than the 15-yr bond
The value of the 20-yr bond will decrease by $45 more than the 15-yr bond
The value of the 20-yr bond will increase by $34 more than the 15-yr bond
The value of the 20-yr bond will increase by $11 more than the 15-yr bond
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
