Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has five years to maturity, whereas Bond Dave has 16 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has five years to maturity, whereas Bond Dave has 16 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))
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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Am. 341.
Transcribed Image Text:Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual
payments, and are priced at par value. Bond Sam has five years to maturity,
whereas Bond Dave has 16 years to maturity.
If interest rates suddenly rise by 2 percent, what is the percentage change in the
price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a
minus sign. Round your answers to 2 decimal places. (e.g., 32.16))
Percentage change in price of Bond Sam
Percentage change in price of Bond Dave
%
Percentage change in price of Bond Sam
Percentage change in price of Bond Dave
%
If rates were to suddenly fall by 2 percent instead, what would be the percentage
change in the price of Bond Sam and Bond Dave? (Round your answers to 2
decimal places. (e.g., 32.16))
%
%
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