A bond trader purchased each of the following bonds at a yield to maturity of 8 percent.

Question:

A bond trader purchased each of the following bonds at a yield to maturity of 8 percent. Immediately after she purchased the bonds, interest rates fell to 7 percent. What is the percentage change in the price of each bond after the decline in interest rates? Fill in the following table:

Price @ 7% Percentage Change Price @ 8% 10-year, 10% annual coupon 10-ycar zero 5-ycar zero 30-year zero $100 perpetuity

Bonds
When companies need to raise money, issuing bonds is one way to do it. A bond functions as a loan between an investor and a corporation. The investor agrees to give the corporation a specific amount of money for a specific period of time in exchange... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...