What is the percentage change in price of bond

Assignment Help Finance Basics
Reference no: EM131947315

Question: Both bond A and bond B have 6.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while bond B has 15 years to maturity.

a. If interest rates suddenly rise by 1 percent, what is the percentage change in price of bond A and bond B? (Negative answers 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 A %

Bond B %

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

Bond A %

Bond B %

Reference no: EM131947315

Questions Cloud

What is the current yield for bond : Bond D is a 6 percent coupon bond currently selling at a discount. The bond makes annual payments, have a YTM of 7 percent, and have 10 years to maturity.
What is the duration of the bond : A bond currently sells for $1,040, which gives it a yield to maturity of 8%. Suppose that if the yield increases by 30 basis points.
What is the desired cycle time : It plans to use this production line sixteen hours a day in order to meet projected demand of 1575 units.
What is the present value of the net cash flow : In the second year of a product's life, the cash flows expected are: marketing cost of $200,000, production cost of $300,000, and a revenue of $900,000.
What is the percentage change in price of bond : If interest rates suddenly rise by 1 percent, what is the percentage change in price of bond A and bond B? (Negative answers should be indicated by a minus.
Calculate the volume of a rectangular solid : Need c++ program that includes three functions, one each to calculate the volume of a rectangular solid (a block), a sphere, and a cone.
What is the dirty value of bond : Yield: The yield required by investors for a 2-year average life bond rated BB by Standard & Poors and Ba2 by Moody's is 2.75%.
Bcnf decomposition of a relation : Implement the algorithm given in class to compute the BCNF decomposition of a given relation and a set of functional dependencies.
Compare and contrast ddl commands with dml commands : Compare and contrast DDL commands with DML commands. You are requested to submit one example of SQL query for DDL

Reviews

Write a Review

Finance Basics Questions & Answers

  Find the pretax economic value

TKK has $1 billion of capital invested in several projects that are expected to create a pretax operating profit of $170 million next year. TKK has an estimated tax cost of capital of 15 percent

  What communications media have traditionally been used

Name several types of new media, and describe how they have been used in recent years in communicating disaster information.

  Payment and simple rate of interest

You borrow a $345,000 add-on interest loan from the credit union and will repaid in equal installment over 12 years. The nominal rate of interest is 4.75%. Assuming daily payment and simple rate of interest obtain the annual percentage rate.

  Determine the amount of external financing needed

Given the compressed version of balance sheet and income statement; determine the amount of external financing needed to increase sales by twenty percent next year.

  What is your financial recommendation

the clinic is supposed to have an average of 100 patients per month. calculate your break-even analysis for the clinc? what is your financial recommendation?

  Find what is the firm weighted average cost of capital

A firm has a debt to equity ratio of 0.6, a leveraged firm value of $9,200, a pre-tax cost of debt of 8 percent, a cost of equity of 16 percent, and a tax rate of 32 percent. What is the firm's weighted average cost of capital?

  Attracting foreign direct investment

A developing country wants to become more global, hoping to increase the pace of its economic growth and improve the quality of life for its people. It wants to achieve this by attracting foreign direct investment.

  What does the historical cost of a plant asset include

What are plant assets? Provide some examples. Plant assets are recorded at historical cost. What does the historical cost of a plant asset include?

  Relationship between the stockholder and management

In the corporate world, it is often argued that there exists a principal/agent relationship between the stockholder and management.

  What is their nominal yield to maturity

A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 6 years at $1,210, and currently sell at a price of $1,370.99.

  Some real estate industry persons have suggested that it is

some real estate industry persons have suggested that it is good to require a title insurance commitment as evidence of

  Present to the ceo recommendations

Create an executive presentation (power point) or an Executive memorandum (word)As the Training Director for Noe Suites you are to present to the CEO.

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