Question: yield curve year Yield ( % ) 0 . 5 3 . 4 5 % 1 3 . 6 5 0 0 % 1 .
yield curve
year Yield
Part a
Calculate the price of semiannual coupon paying bond with maturity of years. Assume par value is
Part b
Calculate the price of semiannual coupon paying bond with maturity of years. Assume par value is
Part c
If the entire yield curve increases by what is the percentage price change of coupon paying bond?
Part d
If the entire yield curve increases by what is the percentage price change of coupon paying bond.
Part e
Which bond reacts more to the change in yield, and why?
Zero coupon bond reacts more because the cash flows arrive at the end and teher is no gain from the coupon reinvestment.
Use FINRA for todays data and numbers. Please upload excel functions, I have attached the problem
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