S07-20 Interest Rate Risk [LO2] Bond / has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e. g., 32.16.) \table[[,,], [Percentage change in price of Bond J, -21.59, % 30 S07-20 Interest Rate Risk [LO2] Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Bond J Percentage change in price of Bond K -21.59% -17.55% What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Bond J. Percentage change in price of Bond K 29.74 % 23.33%
S07-20 Interest Rate Risk [LO2] Bond / has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e. g., 32.16.) \table[[,,], [Percentage change in price of Bond J, -21.59, % 30 S07-20 Interest Rate Risk [LO2] Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Bond J Percentage change in price of Bond K -21.59% -17.55% What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Bond J. Percentage change in price of Bond K 29.74 % 23.33%
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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![S07-20 Interest Rate Risk [LO2] Bond / has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both
bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly
rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a
minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.
g., 32.16.) \table[[,,], [Percentage change in price of Bond J, -21.59, %
30
S07-20 Interest Rate Risk [LO2]
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both
bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6
percent.
If interest rates suddenly rise by 2 percent, what is the percentage price change of these
bonds? (A negative answer should be indicated by a minus sign. Do not round
intermediate calculations and enter your answers as a percent rounded to 2 decimal
places, e.g., 32.16.)
Percentage change in price of Bond J
Percentage change in price of Bond K
-21.59%
-17.55%
What if rates suddenly fall by 2 percent instead? (Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Percentage change in price of Bond J.
Percentage change in price of Bond K
29.74 %
23.33%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0f9952c-3036-4981-a393-9170f7dc0f11%2Fed90688f-2e8b-4454-b816-ab8709ebf66d%2Frl74rog_processed.png&w=3840&q=75)
Transcribed Image Text:S07-20 Interest Rate Risk [LO2] Bond / has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both
bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly
rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a
minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.
g., 32.16.) \table[[,,], [Percentage change in price of Bond J, -21.59, %
30
S07-20 Interest Rate Risk [LO2]
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both
bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6
percent.
If interest rates suddenly rise by 2 percent, what is the percentage price change of these
bonds? (A negative answer should be indicated by a minus sign. Do not round
intermediate calculations and enter your answers as a percent rounded to 2 decimal
places, e.g., 32.16.)
Percentage change in price of Bond J
Percentage change in price of Bond K
-21.59%
-17.55%
What if rates suddenly fall by 2 percent instead? (Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Percentage change in price of Bond J.
Percentage change in price of Bond K
29.74 %
23.33%
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