Question: asap tures in 1 year. a. What will the value of the Bond L be if the going interest rote is 7%,9%, and 14% ?
tures in 1 year. a. What will the value of the Bond L be if the going interest rote is 7%,9%, and 14% ? Assume that only one more interest payment is to be mase on Band 5 at its maturity and that 20 more payments are to be made on Bond L Round your answers fo the nearest oent. b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? 1. Long-term bonds have lower interest rate risk than do short-term bonds. 11. Long-term bonds have lower reinvestment rate risk than do short-term bonds. 1If. The change in price due to a change in the required rate of return increases as a bond's maturity decreases. IV, Long-term bonds have greater intereat rate risk than do short-term bonds. V. The change in price due to a change in the required rate of return decreases-as a bend's maturity increases
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