Bond Pricing: Level 2-3 Challenges Practice Problems Online

An investor bought a bond with a constant coupon rate for $1000 with a current yield of 10%. If the yield rises to 11%, what happens to the price?

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Which of the following bonds, issued by the same corporation, would have the highest price volatility?

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If you believe that interest rates will rise soon, which of the following bond trades should you make (to maximize your percentage return)?

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What is the dollar duration (in $) of a $100 bond that pays 10% coupon rate for 5 years, with a constant yield curve of 6%?

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You own a bond that will pay 7% per year for the next 10 years, on a principal of $20,000. If the prevailing discount rate is 10% throughout, what is the bond worth now?

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Bond Pricing

Challenge Quizzes

Level 2-3

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