Question

CONSIDER 2 BONDS X AND Y.EACH PAYS A COUPON RATE OF INTEREST 8% SEMI ANNUALLY.BOND X WILL MATURE IN 3 YEARS WHILE BOND Y WILL MATURE IN 2 YEARS.IF THE YIELDS TO MATURITY ON THE TWO BONDS CHANGE FROM 8% TO 7.5%,

Answer 1

Explanation:

CONSIDER 2 BONDS X AND Y.EACH PAYS A COUPON RATE OF INTEREST 8% SEMI ANNUALLY.BOND X WILL MATURE IN 3 YEARS WHILE BOND Y WILL MATURE IN 2 YEARS.IF THE YIELDS TO MATURITY ON THE TWO BONDS CHANGE FROM 8% TO 7.5%,