QUESTION #1: Bond J has a coupon rate of 4 percent and Bond K has(Answered)
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QUESTION #1:
Bond J has a coupon rate of 4 percent and Bond K has a coupon rate of 10 percent. Both bonds have 17 years to maturity, make semiannual payments, and have a YTM of 7 percent. 
If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 


Percentage change in price of Bond J  % 
Percentage change in price of Bond K  % 
What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 


Percentage change in price of Bond J  % 
Percentage change in price of Bond K  % 
QUESTION #2:
You purchase a bond with a coupon rate of 7.8 percent and a clean price of $920. 
If the next semiannual coupon payment is due in two months, what is the invoice price? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) 
Invoice price  $ 
QUESTION #1:
Bond J has a coupon rate of 4 percent and Bond K has a coupon rate of 10 percent. Both bonds have 17
years to maturity, make semiannual payments, and have a YTM of 7 percent.
If interest rates suddenly rise by 2 percent, what is the percentage price change of these
bonds? (Negative amounts should be indicated by a minus sign. Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price of Bond J
Percentage change in price of Bond K
%
%
What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter
your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price of Bond J
Percentage change in price of Bond K
%
%
QUESTION #2:
You purchase a bond with a coupon rate of 7.8 percent and a clean price of $920.
If the next semiannual coupon payment is due in two months, what is the invoice price? (Do not round
intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
Invoice price
$
Paper#9210835  Written in 27Jul2016
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