Question: You hold a zero coupon bond when there is a sudden change in interest rates. It has 7 years to maturity. Yield to maturity is
You hold a zero coupon bond when there is a sudden change in interest rates. It has 7 years to maturity. Yield to maturity is 0.09, and rates change by FALLING - 0.006 overnight. By how much does your bond change in value as a percentage or decimal? (Zero coupon bonds assume semi-annual compounding.) \begin{tabular}{|} \hline 0.0399 \\ \hline 0.0434 \\ \hline 0.0411 \\ \hline 0.0424 \\ \hline 0.0443 \\ \hline \end{tabular}
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