What will be the change in the bond's price in dollars? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Change in bond price 4 What will be the change in the percentage? (Negative answer should be indicated by a minus sign. Do not round intermediate calculations, Round your final answer to 2 decimal places.) Change in bond percent %
What will be the change in the bond's price in dollars? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Change in bond price 4 What will be the change in the percentage? (Negative answer should be indicated by a minus sign. Do not round intermediate calculations, Round your final answer to 2 decimal places.) Change in bond percent %
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:A corporate bond with a coupon rate of 7.1 percent has 17 years left to maturity. It has had a credit rating of BBB and a yield to maturity
of 7.8 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new
appropriate discount rate will be 9.1 percent. (Assume interest payments are semiannual.)
What will be the change in the bond's price in dollars? (Negative amount should be indicated by a minus sign. Do not round
intermediate calculations. Round your final answer to 2 decimal places.)
Change in bond price
4
What will be the change in the percentage? (Negative answer should be indicated by a minus sign. Do not round intermediate
calculations. Round your final answer to 2 decimal places.)
Change in bond percent
%
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