Question: Interest Rate Sensitivity THIS IS THE SECOND TIME I AM POSTING THIS QUESTION. IT WAS NOT answered correctly first time. Interest Rate Sensitivity--I have answers

Interest Rate Sensitivity

THIS IS THE SECOND TIME I AM POSTING THIS QUESTION. IT WAS NOT answered correctly first time.

Interest Rate Sensitivity--I have answers show all work formulas

A Bond trader purchased each of the following bonds at a yield to maturity of 8%. Immediatey after she purchased the bonds interest rates fell to 7%. What is the percentage change in the price of each bond after the decline in interest rates? Fill in the following table: (I have all the answers but must show ALL WORK/Formulas). Show Work!

Price at 8% Price at 7% Percentage Change

10 year, 10% annual coupon

10 year zero

5 year zero

30 year zero

$100 perpetuity

Show all Work and formulas

Answers are: 10 year 10% coupon = 6.75%

10 year zero = 9.75%

5 year zero = 4.76%

30 year zero = 32.19%

$100 perpetuity = 14.29%

SHOW ALL WORK ALL FORMULAS.

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