Question

Consider three bonds with 6.3% coupon rates, all 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 7.3%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years $ 8 Years Bond price 30 Years $ b. What will be the price of each bond if their yields decrease to 5.3%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years $0 30 Years $0 Bond price $

Answer 1

4 8 30 a. $966.36 $940.98 $879.56 b. $1,035.21 $1,063.86 $1,148.60 14 30 a. ]=-PV(7.3%,B1,6.3%*1000, 1000) I=-PV(7.3%,C1,6.3%*1000, 1000) =-PV(7.3%,D1,6.3%*1000, 1000) b. =-PV(5.3%B1.6.3%*1000, 1000) =-PV(5.3%,C1,6.3%*1000, 1000) =-PV(5.3%,D1,6.3%*1000, 1000)