Imagine a 25-year annual coupon bond. The bond is selling for $905 today. The bond's coupon rate is 4.2% and the face value is $1,000. If the YTM of this bond decreases 100 basis points (= 1%) tomorrow, what will be the new price? $784.40 $990.71 $1,053,10 $763.53 $1,015.30
Imagine a 25-year annual coupon bond. The bond is selling for $905 today. The bond's coupon rate is 4.2% and the face value is $1,000. If the YTM of this bond decreases 100 basis points (= 1%) tomorrow, what will be the new price? $784.40 $990.71 $1,053,10 $763.53 $1,015.30
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
Related questions
Question
Bhupatbhai
![Imagine a 25-year annual coupon bond. The bond is selling for $905 today. The bond's coupon
rate is 4.2% and the face value is $1,000. If the YTM of this bond decreases 100 basis points (=
1%) tomorrow, what will be the new price?
$784.40
$990.71
$1,053,10
$763.53
$1,015.30](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb118157e-b74a-4ce3-8c5b-5d72e545d5f9%2Fafbb3306-6784-408a-97e0-f2ff87216176%2Ftt7o41k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Imagine a 25-year annual coupon bond. The bond is selling for $905 today. The bond's coupon
rate is 4.2% and the face value is $1,000. If the YTM of this bond decreases 100 basis points (=
1%) tomorrow, what will be the new price?
$784.40
$990.71
$1,053,10
$763.53
$1,015.30
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