Assume that the market rate increases in $1$ day $($overnight$)$ from $2\mathrm{.}15\%$ to $10\%.$Calculate the present value, before and after the change, of the three$-$year and thirty$-$year bonds that have a coupon rate of $5\%.$ What do you notice?

Answer rating: 100% (QA)

Impact of Market Rate Increase on Bond Present Values Scenario Market rate increases overnight from ... View the full answer