The table below shows the time to maturity for 3 bonds, a 2-year, 3-year, and 5- year. Each annual coupon bond has a yield to maturity of 4.36% and a coupon rate of 3.79%. Estimate the percent change in bonds price to a percent change in one plus the interest rate, assuming a 10 basis point change in the interest rates. Approximate Elasticity Maturity 2-year Bond 3-year Bond 5-year Bond

The table below shows the time to maturity for 3 bonds, a 2-year, 3-year, and 5- year. Each annual coupon bond has a yield to maturity of 4.36% and a coupon rate of 3.79%. Estimate the percent change in bonds price to a percent change in one plus the interest rate, assuming a 10 basis point change in the interest rates. Approximate Elasticity Maturity 2-year Bond 3-year Bond 5-year Bond

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 13P

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