consider three bonds with 6.50% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years. What will be the price of the 4-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What will be the price of the 8-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What will be the price of the 30-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
consider three bonds with 6.50% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years. What will be the price of the 4-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What will be the price of the 8-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What will be the price of the 30-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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 22P: Yield to Maturity and Yield to Call
Arnot International’s bonds have a current market price of...
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consider three bonds with 6.50% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years.
- What will be the price of the 4-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
- What will be the price of the 8-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
- What will be the price of the 30-year bond if its yield decreases to 5.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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