Bond Dave has a 5 percent coupon rate, makes semiannual payments, a 8 percent YTM, and 8 years to maturity. If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? Enter the answer with 4 decimals (e.g. 0.0123).

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
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Question 5
Bond Dave has a 5 percent coupon rate, makes semiannual payments, a 8 percent YTM, and 8 years
to maturity. If interest rates suddenly rise by 4 percent, what is the percentage change in the price of
Bond Dave? Enter the answer with 4 decimals (e.g. 0.0123).
-0.2168
Question 6
You purchase a bond with an invoice price of $987. The bond has a coupon rate of 3 percent, and
there are 2 months to the next semiannual coupon date. What is the clean price of the bond? Enter
the answer with 2 decimals (e.g. 954.23).
872.5
Transcribed Image Text:D Question 5 Bond Dave has a 5 percent coupon rate, makes semiannual payments, a 8 percent YTM, and 8 years to maturity. If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? Enter the answer with 4 decimals (e.g. 0.0123). -0.2168 Question 6 You purchase a bond with an invoice price of $987. The bond has a coupon rate of 3 percent, and there are 2 months to the next semiannual coupon date. What is the clean price of the bond? Enter the answer with 2 decimals (e.g. 954.23). 872.5
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