Question

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?)

Answer #1

Hello, consider upvoting the answer, it helps a lot and if you
have any questions, feel free to ask in the comments
section.

Calc:

6. Consider a 10 year bond with face value $1,000 that pays a
6.8% coupon semi-annually and has a yield-to-maturity of 8.4%. 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?)

Consider a 10 year bond with face value $1,000 thatpays a 6.8%
coupon semi-annually and has a yield-to-maturity of 8.4%. What is
the approximate percentage change in the price of bond if interest
ratesin the economy areexpected to decreaseby 0.60% peryear?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?)
(1) Describe and
interpret the assumptions related to the problem.
(2)...

Consider a 10 year bond with face value $1,000, pays 6% coupon
annually and has a yield-to-maturity of 7%. How much would the
approximate percentage change in the price of bond if interest rate
in the economy decreases by 0.80% per year?
increase by 5.55%
increase by 5.55%
increase by 5.98%
decrease by 5.98%

A 12-year, 5% coupon bond pays interest annually. The bond has a
face value of $1,000 and selling for $916. What is the yield to
maturity of this bond?

Consider a one-year maturity, $120,000 face value bond that pays
a 10 percent fixed coupon annually.
What is the price of the bond if market interest rates are 7
percent?
What is the price of the bond if market interest rates are 5
percent?
What is the percentage price change for the bond if interest
rates increase 70
basis points from the original 6 percent?

A 12-year, 5% coupon bond pays interest annually. The bond has a
face value of $1,000. What is the percentage change in the price of
this bond if the market yield rises to 6% from the current level of
5.5%?
I want to make sure that i am doing this correctly. I got
-4.26%, am i correct? If not can you give me a step by step process
on how to find the answer?

a. Consider a coupon bond that pays interest of $60 annually,
has a par value of $1,000, matures in 2 years, and is selling today
at a price of $1000. What is the yield to maturity on this
bond?
b. Consider a zero-coupon bond with a par value of $1,000 that
costs $500 and matures in ten years. What is the yield to maturity
on this bond? Give the formula, and solve.
c. For the bond in part (b) above,...

What is the price of a 30-year, 7% coupon rate, $1,000 face
value bond that pays interest semi-annually, if the yield to
maturity on similar bonds is 6%?
a. $886.9
b. $940.7
c. $1,065.6
d. $1,138.4
e. $1,219.2

What is the price of a 30-year, 7% coupon rate, $1,000 face
value bond that pays interest semi-annually, if the yield to
maturity on similar bonds is 8%? a. $886.9 b. $940.7 c. $1,065.6 d.
$1,138.4 e. $1,219.2

A 16-year, 4.5% coupon bond pays interest semiannually. The bond
has a face value of $1,000. What is the percentage change in the
price of this bond if the market yield to maturity rises to 5.7%
from the current rate of 5.5%?
PLEASE TRY TO BE A SIMPLE AS POSSIBLE, preferably using
excel!

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 8 minutes ago

asked 8 minutes ago

asked 19 minutes ago

asked 24 minutes ago

asked 31 minutes ago

asked 37 minutes ago

asked 39 minutes ago

asked 45 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago