Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 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? multiple choice 1 -7.52% -7.54% 7.68% -8.15% If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave? multiple choice 2 -14.90% -17.51% 16.01% -14.88% If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then? multiple choice 3 -7.49% 8.32% 8.30% 7.68%
Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 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? multiple choice 1 -7.52% -7.54% 7.68% -8.15% If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave? multiple choice 2 -14.90% -17.51% 16.01% -14.88% If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then? multiple choice 3 -7.49% 8.32% 8.30% 7.68%
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
Related questions
Question
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Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 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? | |
multiple choice 1
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| If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave? | |
multiple choice 2
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If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then? |
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multiple choice 3
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If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Dave be then? |
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multiple choice 4
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