Please how can I calculate column 4 (price next year)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer column 4 solve
![Please how can I calculate column 4 (price next year)
TABLE 2 One-Year Returns on Different-Maturity 10%-Coupon-Rate Bonds When Interest
Rates Rise from 10% to 20%
(1)
(2)
(4)
(5)
(6)
Years to
Initial
Rate of
(3)
Initial
Price
Rate of
Сapital
Maturity
When Bond
Is Purchased
Current
Next
Return
(col (2) +
col (5)] (%)
Yield
Price
Year*
Gain
(%)
(S)
(S)
(%)
30
10
1,000
503
-49.7
-39.7
20
10
1,000
516
-48.4
-38.4
10
10
1,000
597
-40.3
-30.3
10
1,000
741
-25.9
-15.9
2
10
1,000
917
-8.3
+1.7
10
1,000
1,000
0.0
+10.0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F48b6d298-bf82-4a83-97ad-03d8c4dc45d7%2F8846190b-b080-4f77-b791-43b531decdf9%2Fvjctzjq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Please how can I calculate column 4 (price next year)
TABLE 2 One-Year Returns on Different-Maturity 10%-Coupon-Rate Bonds When Interest
Rates Rise from 10% to 20%
(1)
(2)
(4)
(5)
(6)
Years to
Initial
Rate of
(3)
Initial
Price
Rate of
Сapital
Maturity
When Bond
Is Purchased
Current
Next
Return
(col (2) +
col (5)] (%)
Yield
Price
Year*
Gain
(%)
(S)
(S)
(%)
30
10
1,000
503
-49.7
-39.7
20
10
1,000
516
-48.4
-38.4
10
10
1,000
597
-40.3
-30.3
10
1,000
741
-25.9
-15.9
2
10
1,000
917
-8.3
+1.7
10
1,000
1,000
0.0
+10.0
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