FinanceNo excel screen shot please Bond Evaluation Part B - Sensitivity to Interest Rate*Calculate the market prices under each combined conditions and answer question 1 and 2 (yellow cells)Investors' Required Rate of Return (Interest Rate)6.00%7.00%8.00%($304.23)($303.12)($302.02)($300.94)($201.94)($201.36)($200.78) ($200.20)($147.39)($147.08)($146.78) ($146.47)1) As the required yield on each bond rises (from 5% to 9%), what happens to the value of the bond?$$parcoupon maturity 5.00%7.00%30157100.00100.007.00%100.00 7.00%9.00%($299.87)($199.64)($146.18)2) When interest rates change, which bond is affected more, long-term bonds or short-term bonds? Why?4

As it offers a single rate that represents the bond's anticipated total return over its entire life,…

Bond Evaluation Part B - Sensitivity to Interest Rate *Calculate the market prices under each combined conditions and answer question 1 and 2 (yellow cells) Investors' Required Rate of Return (Interest Rate) coupon maturity 5.00% 6.00% 7.00% 8.00% 100.00 7.00% 30 ($304.23) ($303.12) ($302.02) ($300.94) 100.00 7.00% 15 ($201.94) ($201.36) ($200.78) ($200.20) 100.00 7.00% 7 ($147.39) ($147.08) ($146.78) ($146.47) 1) As the required yield on each bond rises (from 5% to 9%), what happens to the value of the bond? $ $ par 9.00% ($299.87) ($199.64) ($146.18) 2) When interest rates change, which bond is affected more, long-term bonds or short-term bonds? Why? +

Bond Evaluation Part B - Sensitivity to Interest Rate *Calculate the market prices under each combined conditions and answer question 1 and 2 (yellow cells) Investors' Required Rate of Return (Interest Rate) coupon maturity 5.00% 6.00% 7.00% 8.00% 100.00 7.00% 30 ($304.23) ($303.12) ($302.02) ($300.94) 100.00 7.00% 15 ($201.94) ($201.36) ($200.78) ($200.20) 100.00 7.00% 7 ($147.39) ($147.08) ($146.78) ($146.47) 1) As the required yield on each bond rises (from 5% to 9%), what happens to the value of the bond? $ $ par 9.00% ($299.87) ($199.64) ($146.18) 2) When interest rates change, which bond is affected more, long-term bonds or short-term bonds? Why? +

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 2EP

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