The yield of the 10-year US Treasury bond is 1.20%. It is the risk-free rate. You work for investment manager and your boss asks you to calculate the

The yield of the 10-year US Treasury bond is 1.20%. It is the risk-free rate. You work

for investment manager and your boss asks you to calculate the price of a 10-year

corporate bond that yields 3.00% more than its risk-free rate and has a face value of

$1,000. The fixed coupon of this corporate bond is 5.00%. Both bonds pay coupons

annually.

• What is the current price of the corporate bond?

• Calculate the price of the bond if its yield increased by 1.00%.

• Calculate the price of the bond if its yield decreased by 1.00%.

• Please discuss the risk associated with this change in interest rates?

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

see attached MBA 560 – FINANCIAL STATEMENT ANALYSIS RUBRIC Name: Date Completed: Students will complete the assignment with attention to the

see attached MBA 560 – FINANCIAL STATEMENT ANALYSIS RUBRIC Name: Date Completed: Students will complete the assignment with attention to the criteria below. GRADE: Exceptional Proficient Basic Insufficient /Missing/Late Company Selection Minus 10 points if late Financial Statements Minus 10 points if late Company/Industry Section Horizontal Analysis 3 accounts/line items

Create an 8–12-slide PowerPoint presentation that summarizes the AFI Framework and the results of the internal and external analyses. Your presentation

Create an 8–12-slide PowerPoint presentation that summarizes the AFI Framework and the results of the internal and external analyses. Your presentation must also include a SWOT matrix for the company and your recommendations for strategies to move the company forward that align with organizational structure and governance, and reflect ethical