Yrs to Maturity (1) Bond Price (K d = 8%) (2) % chg in price when K
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Yrs to Maturity (1) | Bond Price (2) | % chg in price when Kd by 2% (3)=[(4)-(2)]/(2) | Bond Price (4) | % chg in price when Kd by 2% (5)= [(6)-(4)]/(4) | Bond Price (6) |
10 | 1,134.20 | -11.83% | 1,000 | -11.3% | 887.00 |
7 | 1,104.13 | -9.43% | 1,000 | -9.13% | 908.72 |
5 | 1,079.85 | -7.39% | 1,000 | -7.21% | 927.90 |
4 | 1,066.24 | -6.21% | 1,000 | -6.07% | 939.25 |
0 | 1,000 | 0% | 1,000 | 0% | 1,000 |
Calculate the percentage change in bond price when Kd increases from 8% to 10%. Show your work.
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