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  3. 9 (15 points) a 4-year 5.8% coupon bond is selling

9 (15 points) A 4-year 5.8% coupon bond is selling to yield 7%. The bond...

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9 (15 points) A 4-year 5.8% coupon bond is selling to yield 7%. The bond pa si annually. One year later interest rates decrease from17% to 62%. st a. What is the initial price of the 4-year 5.8% coupon bond selling to yield 7% b. What is the updated price of this bond one year later if we assume that the iis unchanged at 7%? c. What is the updated price of this bond one year later if the yield decreases to 62%? d. For the bond, one year later interest rates decrease from 7% to 62%, provide) het change attributable to moving to maturity (no change in discount rate); 2) Price change attribute to an increase in the discount rate from 7% to 6.2%; 3) Total price change. (Hint: based on calculation from a, b and c)

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