Consider three bonds with 6.65% coupon rates, all selling at face value. The short-term bond has...
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Consider three bonds with 6.65% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. a. What will be the price of each bond if their yields increase to 7.3%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years Bond price $ $ 30 Years $ b. What will be the price of each bond if their yields decrease to 6%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years Bond price $ $ 30 Years c. Which bond is most sensitive to changes in the interest rates? Consider three bonds with 6.65% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. a. What will be the price of each bond if their yields increase to 7.3%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years Bond price $ $ 30 Years $ b. What will be the price of each bond if their yields decrease to 6%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years Bond price $ $ 30 Years c. Which bond is most sensitive to changes in the interest rates?
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