How much would the price of bond change

Assignment Help Finance Basics
Reference no: EM13266376

Consider a 10 year bond which pays 6% coupon semi-annually and has a yield-to-maturity of 8%. How much would the price of bond change if investors required return changes to 7% per year?

Answer

increase by 6.98%

increase by 7.51%

decrease by 6.98%

decrease by 7.65%

 

 

Reference no: EM13266376

Questions Cloud

Define the electrophilic aromatic substitution reaction : Given that benzaldehyde is a meta- director, draw all three resonance structures for the carbocation intermediate that results from STEP 2 in the electrophilic aromatic substitution reaction when benzaldehyde reacts
What will be the approximate expected cash flow : What will be the approximate expected cash flow in year 5, if the project has an Internal Rate of Return of 6%?
Determine the image distance of the truck : The side mirrors on cars are convex mirrors. If the side mirror on the driver side of your car has a focal length with a magnitude of 5.30 m, determine the image distance of the truck
What is the total mass of the phosphorous in the ingot : A 5 Kg silicon ingot is doped with 10^16 cm^-3 phosphorous atoms. what is the total mass of the phosphorous in the ingot. the atomic mass of silicon and phosphorous are 28.09 g/mol and 31.02g/mol.
How much would the price of bond change : Consider a 10 year bond which pays 6% coupon semi-annually and has a yield-to-maturity of 8%. How much would the price of bond change if investors required return changes to 7% per year?
Explain the fermentation dissolves in the solution : The sucrose solution used in the fermentation was 0.350 M. Assume solubility of CO2 in water equivalent to the solubility in the sucrose solution. Hint: some of the CO2 obtained from the fermentation dissolves in the solution, the rest goes to the..
At least how many torpedoes are required to hit the carrier : Assume an aircraft carrier will be sunk with a probability of .3 if hit by a torpedo. At least how many torpedoes are required to hit the carrier so that it is sunk with a probability of .9
Find the tension in the cable closer to the painter : A scaffold of mass 60 kg and length 5.5 m is supported in a horizontal position by a vertical cable at each end. find the tension in the cable closer to the painter
Determine power that each of the two bulbs will dissipate : An incandescent lightbulb rated at 60 W will dissipate 60 W as heat and light when connected across a 100-V ideal voltage source. A 100-W bulb will dissipate 100 W when connected across the same source.

Reviews

Write a Review

Finance Basics Questions & Answers

  The slope of the regression line

A graph shows a corporation's common stock returns on the Y axis and the market returns on the X axis. The slope of the regression line represents

  Determine which of the following statements is most correct

Your family recently obtained a 30 months 100,000 fixed rate mortgage. Determine which of the following statements is most correct and why?

  What do investors expect the stock to sell for at the end

Assume the risk-free rate is 2% and the expected rate of return on the market is 12%. A share of stock is now selling for $100. It will pay a dividend of $9 per share at the end of the year. Its beta is 1.2. What do investors expect the stock to s..

  Determining mortgage interest deduction

Sue owns a home in Arizona and in New York. She spends winters in Arizona and summers in New York. What are the limits, if any, on the deductibility of the mortgage interest?

  Determining weighted average cost of capital

Global Technology's capital structure is given below, The after tax cost of debt is 6.5%; the cost of preferred stock is 10%; and the cost of common equity is 13.5%.

  International business and local business

Describe how international business may impact a local car business on the basis of competition, exchange rate and interest rate.

  Acquisition of property and related fees

During Year 4, a firm purchased land, building, and equipment for lump sum payment of $450,000. Make the journal entry to record the acquisition of property and related fees.

  Find the value of tax shield

Your company has debt worth $200,000, with a yield of 9%, and equity worth $300,000. It is growing at a 5% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12 percent.

  Make a cash budget

Of Sharpe's sales 10 percent is for cash, another 60% is collected in the month following sales, and 30% is collected in the second month following sales.

  Objective type questions on foreign exchange assets

Objective type questions on foreign exchange assets and When a foreign subsidiary is not wholly owned by the parent

  Us financial standpoint

The events in the financial markets during the past few years have been sweeping and historic, and they have resulted in the biggest federal bailout efforts in history.

  Calculation of net present value with given cash flow

Calculation of net present value with given cash flow and probability and Should the company undertake the project

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