Essay
Calculate the price elasticity of a 15-year bond around its $1,000 par value and 10-percent coupon rate if market interest rates on comparable securities drop to 6 percent. The market price of the bond is $1,392. Suppose now that the yield to maturity climbs to 14%. If the bond's price falls to $751.80, what is the bond's price elasticity?
Correct Answer:
Verified
Correct Answer:
Verified
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