Calculate the % change in price for each bond between the price at a 5% YTM and
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Question:
Calculate the % change in price for each bond between the price at a 5% YTM and the price at a 6% YTM.
Which of the bonds has the biggest percentage change in price when the yield changes from 5% to 6%? Why do you think the bond you identified has the most sensitive price with respect to a 1% change in the YTM?
Which of the bonds has the smallest percentage change in price when the yield changes from 5% to 6%? Why do you think the bond you identified has the least sensitive price with respect to a 1% change in the YTM?
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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