Question: answer all questions please Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of
Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of 12% Both bonds pay their coupons semiannually a. Compute the prices of the two bonds at each Interest rate (Round the bond price to 2 decimal places) b. Suppose Bond A is currently priced to offer a yield to maturity of 8% Calculate the percentages capital gain or loss on the bond of its yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounded to the nearest whole ) Suppose Bond B is currently priced to offer a yield to maturity of 8% Calculate the percentages capital gain or loss on the bond yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounded to the nearest whole 3. Which bond's price oxhibits greater proportional sensitivity to changes in ts yield? In other words, which bond has greater interest e. Which bond pays a high coupon rate has lower average or "effective maturity than a bond that pays a low coupon rate? percent) Complete this question by entering your answers in the tabs below. Required a Required Required Required a Required Suppose Bond A is currently priced to offer a yield to maturity of 8%. Calculate the percentage) capital gain or loss on the bond if its yield immediately changes to each value in yield to maturity. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) Yield Capital Gain or Loss (Percentage) % 2% 3% % 5% % 8% % 7% % % 8% 99 % 10% % 11% 129 % 13. % 14% 135 Pray N 4 Next >
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