Estimate relationship between bond prices and interest rates


Caterpillar has $1000 par value, semi-annual coupon bonds outstanding with 50 years until maturity. These bonds have a 5% annual coupon rate. Create a table where you calculate the value of Caterpillar's bonds at the following nominal (APR) annual required returns (or YTMs): 1%, 3%, 5%, 7%, 9%, & 12%. Also, create a graph where you plot your Caterpillar's bond values against their APR required returns in order to show the relationship between bond prices and interest rates

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Finance Basics: Estimate relationship between bond prices and interest rates
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