Question

Bond Features Maturity (years) = 7 Face Value = $1,000 Starting Interest Rate 3.01% Coupon Rate...

Bond Features

Maturity (years) =

7

Face Value =

$1,000

Starting Interest Rate

3.01%

Coupon Rate =

4%

Coupon dates (Annual)

If interest rates change from 3.01% to 5.94% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 3 ?

State your answer to the nearest penny (e.g., 48.45)

If there is a loss, state your answer with a negative sign (e.g., -52.30)

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