You hold a zero coupon bond when there is a sudden change in interest rates. It has 17 years to maturity. Yield to maturity is 0.055, and rates change by FALLING -0.008 overnight. By how much does your bond change in value as a percentage or decimal? (Zero coupon bonds assume semi-annual compounding.)

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.