FINANCE

10. Bond prices and interest rate An 8 percent coupon bond with 15 years to maturity is priced to offer a 9 percent yield to maturity. You believe that in one year, the yield to maturity will be 6.5 percent. What is the change in price the bond will experience in dollars? (Assume annual interest payments and par value is $1,000.)

  1. 👍 0
  2. 👎 0
  3. 👁 228

Respond to this Question

First Name

Your Response

Similar Questions

  1. Finance

    Which of the following statements about the relationship between yield to maturity and bond prices is FALSE? A. When the yield to maturity and coupon rate are the same, the bond is called a par value bond. B. A bond selling at a

    asked by Anthony on January 25, 2014
  2. Need help by tonite Finance

    15. Bond ratings and prices A corporate bond with an 8.5 percent coupon has 10 years left to maturity. It has had a credit rating of A and a yield to maturity of 10 percent. The firm has recently gotten into some trouble and the

    asked by Anonymous on November 2, 2014
  3. Finance

    Which of the following statements is CORRECT? a. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current

    asked by Alice on October 20, 2011
  4. Finance

    Which of the following statements is CORRECT? a. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current

    asked by Alice on October 20, 2011
  5. finance

    (Bond valuation) Eagle Ventures has a bond issue outstanding with an annual coupon rate of 7 percent and 4 years remaining until maturity. The par value of the bond is $1,000. (a) Determine the current value of the bond if present

    asked by valerie on March 8, 2013
  6. Finance

    Bond value and time--Constant required returns Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 14%, and the company is certain

    asked by Mary on November 7, 2011
  7. Corporate Finance

    The yield-to-maturity on a bond is the interest rate you earn on your investment if interest rates do not change. If you actually sell the bond before it matures, your realized return is known as the holding period yield. Suppose

    asked by Nik on April 21, 2011
  8. Finance

    Bond X is a premium bond making annual payments. The bond pays an 8 percent coupon, has a YTM of 6 percent, and has 13 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 6 percent coupon, has a

    asked by Anna on July 23, 2010
  9. FINANCE

    Bond valuation Callaghan Motors’ bonds have 10 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 8 percent; and the yield to maturity is 9 percent. What is the

    asked by Mel on September 18, 2007
  10. Finace

    Bond valuation Callaghan Motors’ bonds have 10 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 8 percent; and the yield to maturity is 9 percent. What is the

    asked by Sharon on March 17, 2012

More Similar Questions