The yield to maturity for 15-year bonds is as follows for four different bond rating categories. AAA AA 8.20% 8.60 A BBB 9.00% 10.00 The bonds of Falter Corporation were rated as A and issued at par a few weeks ago. The bonds have just been downgraded to BBB. Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. Assume the par value of the bonds is $1,000. (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.) Price of the bonds
The yield to maturity for 15-year bonds is as follows for four different bond rating categories. AAA AA 8.20% 8.60 A BBB 9.00% 10.00 The bonds of Falter Corporation were rated as A and issued at par a few weeks ago. The bonds have just been downgraded to BBB. Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. Assume the par value of the bonds is $1,000. (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.) Price of the bonds
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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Transcribed Image Text:The yield to maturity for 15-year bonds is as follows for four different bond rating categories.
AAA
AA
8.20%
8.60
A
BBB
9.00%
10.00
The bonds of Falter Corporation were rated as A and issued at par a few weeks ago. The bonds have just been downgraded to BBB.
Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. Assume the par value of the
bonds is $1,000. (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.)
Price of the bonds
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