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    billyb's Avatar
    billyb Posts: 1, Reputation: 1
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    #1

    Mar 26, 2007, 05:06 PM
    Interest Rate Effect
    Go to table 10-1 which is based on bonds paying 10 % interest for 20 years. Assume interest rates in the market ( yield to maturity) decline from 11 % to 8%:
    a. what is the bond price at 11%
    b. what is the bond price at 8%
    c. what would be your percentage return on investment if you bought when rates 11 % and sold when rates were 8 %
    billcrump's Avatar
    billcrump Posts: 1, Reputation: 1
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    #2

    Jul 25, 2007, 06:21 PM
    Quote Originally Posted by billyb
    Go to table 10-1 which is based on bonds paying 10 % interest for 20 years. Assume interest rates in the market ( yield to maturity) decline from 11 % to 8%:
    a. what is the bond price at 11%
    b. what is the bond price at 8%
    c. what would be your percentage return on investment if you bought when rates 11 % and sold when rates were 8 %
    If interest rate go up what will be the effect of my bonds
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