15.6 - 1,069.92 $ 877.60 $ STRIP BOND 7 7 PRICE 10 PRICE...

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BOND QUESTION Two bonds  Regular  10 year bond with a 8% coupon Strip  coupon bond Each is currently yielding 7% REQUIRED 1. 2. increases to 10%) 3. bonds
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REGULAR BOND @ 7% 7% PRICE COUPON 80.00 $ 7.024 561.92 $ PRINCIPAL 1,000.00 $ 0.508 508.00 $ 1,069.92 $
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STRIP BOND @ 7% $ 7% PRICE MATURITY 1,000.00 $ 0.508 508.00 $
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REGULAR BOND @ 10% 7% 10% COUPON 80.00 $ 7.024 561.92 $ 6.145 491.60 $ PRINCIPAL 1,000.00 $ 0.508 508.00 $ 0.386 386.00 $
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Unformatted text preview: 1,069.92 $ 877.60 $ STRIP BOND @ 7% 7% PRICE 10% PRICE MATURITY 1,000.00 $ 0.508 508.00 $ 0.386 386.00 $ VOLATILITY REGULAR BOND 7% 10% COUPON 80.00 $ 7.024 561.92 $ 6.145 491.60 $ PRINCIPAL 1,000.00 $ 0.508 508.00 $ 0.386 386.00 $ 1,069.92 $ 877.60 $ VOLATILITY BOND 18% VOLATILITY STRIP BOND @ 7% 7% 10% MATURITY 1,000.00 $ 0.508 508.00 $ 0.386 386.00 $ VOLATILITY STRIP 24% SUMMARY ❚ STRIP COUPON BONDS ARE MUCH MORE VOLATILE THAN REGULAR BONDS ❚ REGULAR 18% down ❚ STRIP 24% down ❚ OR 33% MORE VOLATILE...
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15.6 - 1,069.92 $ 877.60 $ STRIP BOND 7 7 PRICE 10 PRICE...

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