Interest rate sensitivity


Interest Rate Sensitivity:

A bond trader purchased each of the following bonds at a yield to maturity of 9%. Immediately after she purchased the bonds, interest rates fell to 5%. 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 @ 9% Price @ 5% Percentage Change
10-year, 10% annual coupon $ $ %
10-year zero %
5-year zero %
30-year zero %
$100 perpetuity %

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Finance Basics: Interest rate sensitivity
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