Question: (b) Suppose interest rates decrease. Rank the following bonds from lowest to highest price change. Justify your ranking. (i) (ii) (iii) Singapore government 5-year, 3%

(b) Suppose interest rates decrease. Rank the following bonds from lowest

(b) Suppose interest rates decrease. Rank the following bonds from lowest to highest price change. Justify your ranking. (i) (ii) (iii) Singapore government 5-year, 3% coupon bond Indonesian government 5-year, 6% coupon bond 5-year floating rate note rated AA, paying 5-year LIBOR rate + 1% (5-year LIBOR rate before interest rate decreases was 3.3%) (8 marks)

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