A.
Bond Features 

Maturity (years) = 
10 
Face Value = 
$1,000 
Starting Interest Rate 
4.98% 
Coupon Rate = 
4% 
Coupon dates (Annual) 
If interest rates change from 4.98% to 6.58% 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)
B.
Bond Features 

Maturity (years) = 
6 
Face Value = 
$1,000 
Starting Interest Rate 
4.86% 
Coupon Rate = 
4% 
Coupon dates (Annual) 
If interest rates change from 4.86% to 5.66% immediately after you buy the bond today (and stay at the new interest rate), what is the price effect in year 4 ?
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)
Answer:
Dear student happy to assist you, please "UPVOTE" the solution. Thank you :)
Get Answers For Free
Most questions answered within 1 hours.