Consider a bond with a 10% coupon rate and face value of $1,000. a. Calculate the...

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Consider a bond with a 10% coupon rate and face value of $1,000. a. Calculate the price of the bond for different yields to maturity and times to maturity. Think about the price for yields from 5% to 15% and for maturities of 5 years to 30 years (in five year increments). (Do this by creating a data table, put the yields in the column.) Graph your results from part a. with yield to maturity on the x-axis and price on the y- b. axis c. What patters do you observe? Why do you think this is the case? d. Do the same from above, but consider a 30 year bond in all cases and think about how the price of the bond changes in response to the yield for different coupon rates. i. Try coupon rates of 0%, 5%, 10%, and 15%. ii. Calculate percentage changes in price for each 1 percentage point change in yield. (what is the percentage difference in price if the yield is 6% instead of 5%?) e. What patterns do you observe in your answer to d? Why do you think this is the case? Consider a bond with a 10% coupon rate and face value of $1,000. a. Calculate the price of the bond for different yields to maturity and times to maturity. Think about the price for yields from 5% to 15% and for maturities of 5 years to 30 years (in five year increments). (Do this by creating a data table, put the yields in the column.) Graph your results from part a. with yield to maturity on the x-axis and price on the y- b. axis c. What patters do you observe? Why do you think this is the case? d. Do the same from above, but consider a 30 year bond in all cases and think about how the price of the bond changes in response to the yield for different coupon rates. i. Try coupon rates of 0%, 5%, 10%, and 15%. ii. Calculate percentage changes in price for each 1 percentage point change in yield. (what is the percentage difference in price if the yield is 6% instead of 5%?) e. What patterns do you observe in your answer to d? Why do you think this is the case?

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Bond Price Sensitivity Analysis This analysis explores the relationship between a bonds price yield to maturity YTM coupon rate and time to maturity a Bond Price with Different Yields and Maturities Y... View the full answer