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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 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

 

 

 

 

Abhinav 04-Dec-2019

Answer (UnSolved)

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