Consider three bonds with 5.9% coupon rates, oll selling at face value. The short-termbond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and thelong term bond has maturity 30 yearsa. What will be the price of each bond if their yields increase to 6.9%? (Do not roundintermediate calculations. Round your answers to 2 decimal places)30 Years4 Years$.8 YearsBond priceb. What will be the price of each bond if their yields decrease to 4.9% (Do not roundintermediate calculations. Round your answers to 2 decimel places.)4 Years8 Years30 YearsBond price

a. given, coupon rate =5.9% par = 1000 r=6.9% bond price for n =4 years: price of bond =coupon rate…

Answered: Consider three bonds with 5.9% coupon…

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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