a. If interest rates suddenly rise by 1.4 percent, what is the percentage change in price of Bond A and Bond B? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. %A in Price Bond A -8.01 % Bond B -11.54 % b. If interest rates suddenly fall by 1.4 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) X Answer is complete but not entirely correct. %A in Price Bond A 8.97 X % Bond B 13.69 %
a. If interest rates suddenly rise by 1.4 percent, what is the percentage change in price of Bond A and Bond B? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. %A in Price Bond A -8.01 % Bond B -11.54 % b. If interest rates suddenly fall by 1.4 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) X Answer is complete but not entirely correct. %A in Price Bond A 8.97 X % Bond B 13.69 %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
50
Transcribed Image Text:Both Bond A and Bond B have 8.8 percent coupons and are priced at par value. Bond A has 9
years to maturity, while Bond B has 18 years to maturity.
a. If interest rates suddenly rise by 1.4 percent, what is the percentage change in price of Bond A
and Bond B? (A negative value should be indicated by a minus sign. Do not round
intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
Answer is complete but not entirely correct.
%A in Price
Bond A
-8.01 X %
Bond B
-11.54
%
b. If interest rates suddenly fall by 1.4 percent instead, what would be the percentage change in
price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a
percent rounded to 2 decimal places.)
Answer is complete but not entirely correct.
%A in Price
Bond A
8.97
%
Bond B
13.69
%
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