What is the value of your portfolio

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You own a two-bond portfolio. Each has a par value of $1,000. Bond A matures in five years, has a coupon rate of 8 percent, and has an annual yield to maturity of 9.20 percent. Bond B matures in fifteen years, has a coupon rate of 8 percent and has an annual yield to maturity of 9.20 percent. Both bonds pay interest semi-annually.

What is the value of your portfolio? What happens to the value of your portfolio if each yield to maturity rises by one percentage point?

Reference no: EM13877701

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