What is the percentage change in the price of the bonds

Assignment Help Financial Econometrics
Reference no: EM13333593

Bond J has a coupon rate of 4 percent. Bond S has a coupon rate of 14 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8 percent. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

Reference no: EM13333593

Questions Cloud

How would one find the potential energy of the springs : if two springs are attatched to one another and a mass is added at the bottom, how would one find the potential energy of the springs
Calculate the npv if the discount rate is 10 percent : A project that costs $3,600 to install will provide annual cash flows of $860 for each of the next 6 years. A. Calculate the NPV if the discount rate is 10% B. Is this project worth pursuing
What is the magnitude of your acceleration : While at the county fair, you decide to ride the Ferris wheel. Having eaten too many candy apples and elephant ears, you find the motion somewhat unpleasant. What is the magnitude of your acceleration
Explain the temperature and pressure of the system : When electrical current of unknown magnitude is run through the device for 4.00min , 13.1mL of water-saturated H2(g) is collected. The temperature and pressure of the system are 25C and 715torr. A. How many moles of hydrogen gas are produced
What is the percentage change in the price of the bonds : Bond J has a coupon rate of 4 percent. Bond S has a coupon rate of 14 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8 percent.
Name the complex ion present when the compounds dissolved : Name the complex ion present when the followng compounds are dissolved in water and determine the number of moles of each species present if one mole of the compound is dissolved
What is the magnitude of the force of water resistance : The aircraft carrier John F. Kennedy has mass 7.4 107 kg. When its engines are developing their full power of 280,000 hp, the John F. what is the magnitude of the force of water resistance
Determine the change in the medallion fee that maximize : How much will firm 1 earn if it convinces the mayor to decrease the medallion fee by $40,000 (F = – $40) so that the medallion fee is entirely eliminated?
What is the sample standard deviation of the above returns : Given that Dov Pharmaceuticals was down by 98% for 2006, why did some investors hold the stock. Why didn't they sell out before the price declined so sharply.

Reviews

Write a Review

Financial Econometrics Questions & Answers

  How long will take jack to win jills hand in marriage

Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $330,000 Rolls-Royce Phantom. Jack currently has $50,680 that he may invest.

  What will be your total accumulated money in the end of year

If you deposited $1,000 with an Annual interest Rate of 16% with 12 Compounding Periods Per Year (M) in the total of 6 Compounding Periods (Years). What will be your total accumulated money in the end of 6 years

  How much can withdraw each month from the account

To do this, you will invest $830 a month in a stock account and $430 a month in a bond account. The return of the stock account is expected to be 10.3 percent, and the bond account will pay 6.3 percent.

  Determine what is capitals after-tax wacc

If the returns required by investors are 10 percent, 13 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capital's after-tax WACC. Assume that the firm's marginal tax rate is 40 percent.

  What is the bonds price if comparable debt yields 12 percent

A high-yield bond has the following terms: Principal amount $1,000 Annaul Interest Paid $100 Maturity 10 years (a) What is the bond's price if comparable debt yields 12 percent

  Find the firms dividend payout ratio and retention ratio

Payout and retention ratio: Drekker, Inc., has revenues of $312,766, costs of $220,222, interest payment of $31,477, and a tax rate of 34 percent. It paid dividends of $34,125 to shareholders.

  Prepare an income statement for year using single-step form

Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format.

  How much will jack have to invest today in an account

Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target

  How do you create or decrease leverage

What is leverage, how do you create or decrease leverage and why is leverage used?

  What is the effective annual rate-ear on the loan

You have a car loan with a nominal rate of 7.29 percent. With interest charged monthly, what is the effective annual rate (EAR) on the loan

  What position should the company take long or short

a company has a portfolio of stocks worth $100 million. the beta of the porfolio is 1.2. the company would like to use the CME december futures contract on the s&p 500 to change the beta of the portfolio to 0.5 during the period July 16 to Novembe..

  Determine what is the couples marriage penalty or benefit

In 2013, Lisa and Fred, a married couple, have taxable income of $300,000. If they were to file separate tax returns, Lisa would have reported taxable income of $125,000 and Fred would have reported taxable income of $175,000.

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