Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 16, Problem 7CP

A

Summary Introduction

To calculate: The percentage change in price for the CIC and PTR bonds.

Introduction: The percentage change in price of the bond is product of the effective time period with yield to maturity period of the particular bond.

B

Summary Introduction

To calculate: The 6-month horizon returns for bond CIC and PTR.

Introduction: The holding period of the bond is the ratio of the sum of the prices to the initial price of the bond. The sum of the price consist the end value, coupon value and initial value of the bond.

C

Summary Introduction

To explain: Different variation of the actual price of the bonds.

Introduction: The interest rate goes down by 50 points. Due to this there is a change in actual price of the bonds but change is different in both the bonds.

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