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  3. 1) if the yield to maturity increases from 10% to

1) If the yield to maturity increases from 10% to 15%, calculate the percent changein...

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Finance

1) If the yield to maturity increases from 10% to 15%, calculate the percent changein the price of the following assets:(Note: before you can calculate the percent change you must calculate the bond price before and after the YTM changes)

a) a 1 year zero coupon $1000 T-bill

b) a 10 year zero coupon $1000 face value corporate bond

c) a 30 year zero coupon $1000 face value corporate bond

Assume that the job insecurity associated with the coming recession makes people less inclined to tie up their money in long maturities (b/c if they get laid off, they'll need access to their money). In words describe how this will affect the term structure of interest rates and the liquidity premium.

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