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1)What is the percentage change in price for a zero coupon bondif the yield changes from 5.5?% to 9?%? The bond has a face valueof ?$1,000 and it matures in 11 years. Use the price determinedfrom the first? yield, 5.5?%, as the base in the percentagecalculation. The percentage change in the bond price if the yieldchanges from 5.5?% to 9?% is ?%2)With celebrity? bonds, celebrities raise money by issuingbonds to investors. The royalties from sales of the music are usedto pay interest and principal on the bonds. In April of? 2009, EMIannounced that it intended to securitize its back catalogue withthe help of the Bank of Scotland. The bond was issued with a couponrate of 6.55% and will mature on this day 31 years from now. Theyield on the bond issue is currently 6.35?%. At what price shouldthis bond trade? today, assuming a face value of ?$1,000 andannual? coupons? The price of the bond today should be $3) A Ford Motor Co. coupon bond has a coupon rate of 6.95%, andpays annual coupons. The next coupon is due tomorrow and the bondmatures 36 years from tomorrow. The yield on the bond issue is6.1?%. At what price should this bond trade?today, assuming a facevalue of ?$1,000 The price of the bond today should be ?$.
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