Both bond bill and bond ted have 116 percent coupons make, Ask an Expert

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Both Bond Bill and Bond Ted have 11.6 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 6 years to maturity, whereas Bond Ted has 23 years to maturity. Both bonds have a par value of 1,000.

1) If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?

2) If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92667234

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