Home / Questions / INTEREST RATE SENSITIVITY: An investor purchased the following 5 bonds. Each bond had a pa
INTEREST RATE SENSITIVITY: An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and an 8% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each than had a new YTM of 7%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table:
Bond
Price @ 8%
Price @7%
Percent Change
10-year, 10% annual coupon
10-year zero
5-year zero
30-year zero
$100 perpetuity
|
Bond |
Price @ 8% |
Price @7% |
Percent Change |
|
10-year, 10% annual coupon |
|
|
|
|
10-year zero |
|
|
|
|
5-year zero |
|
|
|
|
30-year zero |
|
|
|
|
$100 perpetuity |
|
|
|
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