Consider three bonds with 5.9% coupon rates, oll selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long term bond has maturity 30 years a. What will be the price of each bond if their yields increase to 6.9%? (Do not round intermediate calculations. Round your answers to 2 decimal places) 30 Years 4 Years $. 8 Years Bond price b. What will be the price of each bond if their yields decrease to 4.9% (Do not round intermediate calculations. Round your answers to 2 decimel places.) 4 Years 8 Years 30 Years Bond price
Consider three bonds with 5.9% coupon rates, oll selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long term bond has maturity 30 years a. What will be the price of each bond if their yields increase to 6.9%? (Do not round intermediate calculations. Round your answers to 2 decimal places) 30 Years 4 Years $. 8 Years Bond price b. What will be the price of each bond if their yields decrease to 4.9% (Do not round intermediate calculations. Round your answers to 2 decimel places.) 4 Years 8 Years 30 Years Bond price
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 17P: Bond Value as Maturity Approaches An investor has two bonds in his portfolio. Each bond matures in 4...
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