Consider a 12-year bond with face value $1,000 that pays an 8.6% coupon semi-annually and has a yield-to-maturity of 7.7%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to decrease by 0.60% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?)
Hello, consider upvoting the answer, it helps a lot and if you
have any questions, feel free to ask in the comments
Get Answers For Free
Most questions answered within 1 hours.