Percentage Bond Price @8% Price @7% Change 10-year, 10% annual coupon 10-year zero 5-year zero 30-year zero $100 perpetuity

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
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An investor purchased the following five bonds. Each bond
had a par value of $1,000 and an 8% yield to maturity on the purchase day. Immediately
after the investor purchased them, interest rates fell, and each then had a new YTM of 7%.
What is the percentage change in price for each bond after the decline in interest rates? Fill
in the following table:

Percentage
Bond
Price @8%
Price @7%
Change
10-year, 10% annual coupon
10-year zero
5-year zero
30-year zero
$100 perpetuity
Transcribed Image Text:Percentage Bond Price @8% Price @7% Change 10-year, 10% annual coupon 10-year zero 5-year zero 30-year zero $100 perpetuity
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