What is the percentage price change of these bonds

Assignment Help Financial Management
Reference no: EM131323962

Bond J is a 8 percent coupon bond. Bond K is a 12 percent coupon bond. Both bonds have 12 years to maturity and have a YTM of 9.5 percent. a. If interest rates suddenly rise by 1 percent, what is the percentage price change of these bonds? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Bond J %

Bond K %

b. If interest rates suddenly fall by 1 percent, what is the percentage price change of these bonds? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Bond J %

Bond K %

Reference no: EM131323962

Questions Cloud

Annual dividend on common stock : The last annual dividend on KCBT Corporation's common stock, paid yesterday, was $0.50. If you require a rate of return of 10 percent, If you expect the dividends on KCBT to grow at a constant rate of 9 percent, what is the highest price you should b..
The bond is convertible into common stock : For each of the following characteristics which a bond may have, would their presence tend to increase or decrease the yield to maturity. The bond is convertible into common stock.
Calculate the new bond price : Consider a 8 percent coupon bond with nine years to maturity and a current price of $1,036.80. Suppose the yield on the bond suddenly increases by 2 percent. Use duration to estimate the new price of the bond. Calculate the new bond price.
What is the modified duration : What is the Macaulay duration of a 5.8 percent coupon bond with eleven years to maturity and a current price of $1,060.10? What is the modified duration?
What is the percentage price change of these bonds : Bond J is a 8 percent coupon bond. Bond K is a 12 percent coupon bond. Both bonds have 12 years to maturity and have a YTM of 9.5 percent. If interest rates suddenly rise by 1 percent, what is the percentage price change of these bonds?
Experienced significant turmoil in certainty of revenue : In recent years, the health care industry has experienced significant turmoil in the certainty of revenue and access to capital markets. However, the need to update equipment, expand and contract service offerings and more effectively meet the needs ..
What is highest price you should be willing to pay for stock : The last annual dividend on KCBT Corporation's common stock, paid yesterday, was $0.50. If you require a rate of return of 10 percent, KCBT has just announced a new product that they expect to cause the company to experience supernormal growth for tw..
Present value of growth opportunities in the price of stock : As in the previous question, a Stock just paid a dividend of $2.00 per share. The required return on stocks of this risk is 18.5%. The company has a policy of paying out 2/3 of its earnings as dividends. If the stock is priced today at $19.50, What i..
Plus interest on unpaid balance at the end of each period : Hyundai USA has numerous robotic welders as well as robotic checkers with vision. One small underbody robotic welder costing $1,200,000 (7-year Property class) was installed and is increasing productivity by 2.5% in one area. Pay the accumulated inte..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What will the annual cash flow be

If you put up $48,000 today in exchange for a 6.25 percent, 15-year annuity, what will the annual cash flow be?

  How many dollars will the cash management system free up

Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by two an..

  Securities are generally sold in the primary markets

Securities are generally sold in the primary markets with the help of a ___ serving as a a _____

  How much will sarah have to invest today

How much will Sarah have to invest today? If she earned an annual return of 18%, how soon could she then retire?

  International owned depreciable plant assets

On July 1 of the current year, Melissa Co. acquired 25% of the outstanding shares of common stock of International Co. at a total cost of $700,000. The underlying equity (net assets) of the stock acquired by Melissa was only $600,000. Compute the tot..

  Required rate of return on the stock

GoFit Training Inc just paid an annual year-end dividend of $1.60 per share. It plans to increase the dividend by 7% next year, and increase it by the same percentage for the future. If the required rate of return on the stock is 8%, what is the valu..

  Full of stories lately about the stock market problems

The news has been full of stories lately about the stock market problems, sub-prime mortgages, and ponzi schemes. All of these required people to make decisions. Research one of the stories and discuss how motivation influenced people to make such te..

  Dual trading creates the benefit

Dual trading creates the following benefit

  Marketers attempt to increase the percent of industry sales

If marketers attempt to increase the percent of industry sales their product will attract, they are using:

  Gross profit and ending inventory

The Bradley Corporation produces a product with the following costs as of July 1, 2014: Material $ 4 per unit Labor 4 per unit Overhead 2 per unit Beginning inventory at these costs on July 1 was 4,250 units. What is the value of ending inventory?

  Inter arrival times and service times are exponential

A bank is trying to determine which of two machines should be rented to process checks. Machine 1 rent for $10,000 per year and processes 1,000 checks per hour. Machine 2 rents for $15,000 per year and processes 1,600 checks per hour. Assuming that i..

  Narrowest distribution of returns for the period

Which one of the following has the narrowest distribution of returns for the period 1926-2011?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd