1) Renfro Rentals has issued bonds that have a 9% coupon rate, payable semiannually. The bonds mature in 16 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? Round your answer to the nearest cent.
2)A bond trader purchased each of the following bonds at a yield to maturity of 10%. Immediately 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. Round your answers to two decimal places.
|
Price @ 10% |
Price @ 7% |
Percentage Change |
| 10-year, 10% annual coupon |
$ |
$ |
% |
| 10-year zero |
|
|
% |
| 5-year zero |
|
|
% |
| 30-year zero |
|
|
% |
| $100 perpetuity |
|
|
% |