Calculation of Percentage Change in Yield to Maturity Date of Bonds of a Company-Multiple Choice Question
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Question
Consider the following four bonds that pay annual coupons:
|
Bond |
Years to maturity |
Coupon |
YTM |
|
A |
1 |
0% |
5% |
|
B |
5 |
6% |
7% |
|
C |
10 |
10% |
9% |
|
D |
20 |
0% |
8% |
The percentage change in the price of the bond "A" if its yield to maturity increases from 5% to 6% is closest to:
A) -4%
B) -6%
C) -1%
D) 4%
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