Bond X is a 3.5% coupon bond. Bond Y is a 10% coupon bond. Both bonds have 10 years to maturity and make half-yearly coupon payments. Assume each is a par bond trading at face value. If the Y TM falls by 1.5% per annum for both bonds, what are the changes in bond prices for Bond X and Y, respectively?

Answer rating: 100% (QA)

The price of a bond is inversely related to its yield to maturity ... View the full answer