Question

A 8.30 percent coupon bond with 13 years left to maturity is
priced to offer a yield to maturity of 9.0 percent. You believe
that in one year, the yield to maturity will be 8.6 percent. What
is the change in price the bond will experience in dollars?
**(Do not round intermediate calculations. Round your final
answer to 2 decimal places.)**

Answer #1

Ans:- we will use the PV function of excel to find the price of the bond.

For price if YTM is 9%, Rate=9%, Nper=13, Pmt=-$1000*8.3%, FV=-$1000.

For price if YTM is 8.6%, Rate=8.6%, Nper=12, Pmt=-$1000*8.3%, FV=-$1000.

**Therefore, the change in the bond price is approx
$30.49.**

**Note:- If this answer helps you pls give thumbs
up.**

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