Shady Rack Inc. has a bond outstanding with 9.75 percent coupon, paid semiannually, and 17 years to maturity. The market price of the bond is $1,042.43. Calculate the bond's yield to maturity (YTM). Now, if due to changes in market conditions, the market required YTM suddenly increases by 2% from your calculated YTM, what will be the percent change in the market price of the bond? A.-17.76% OB.-17.09% OC.-15.66% OD.-14.87% OE. -14.01% OF. -16.39%
Shady Rack Inc. has a bond outstanding with 9.75 percent coupon, paid semiannually, and 17 years to maturity. The market price of the bond is $1,042.43. Calculate the bond's yield to maturity (YTM). Now, if due to changes in market conditions, the market required YTM suddenly increases by 2% from your calculated YTM, what will be the percent change in the market price of the bond? A.-17.76% OB.-17.09% OC.-15.66% OD.-14.87% OE. -14.01% OF. -16.39%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 10P
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