You are considering buying a 30-year us treasury bond but, Ask an Expert

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You are considering buying a 30-year U.S. Treasury bond but are nervous about the effect on bond price if the yield to maturity on the bond increases. The bond has a 3% coupon rate and pays coupons semi-annually. The duration is 21 years. Suppose that interest rates on this bond rise by 1.5%. Calculate the corresponding percentage change in the price of the bond using the approximation method base on bond duration. Give your answer in percent to one decimal place. If the price decreases, then include a minus sign; if the price increases, do not include any sign. Do not type the % symbol.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92794980

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