Suppose a U.S. Treasury bond paying 3.25-percent coupon has 15 years left to maturity. The...
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Accounting
Suppose a U.S. Treasury bond paying 3.25-percent coupon has 15 years left to maturity. The current interest rate is 4 percent.
A.) If the interest rate rises by 10 basis points (or .10%) six months later, what is the bond's holding period return?
B.) If the interest rate falls by 10 basis points (or .10%) six months later, what is the bond's holding period return?
Express your answers as a percentage. Make sure to round your answers to the nearest 100th percentage point.
P.S. The answer should not be 0.875% for either
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