Change in price, yield due to change in interest rates
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A 10-year Treasury bond is issued with a face value of $1,000, paying interest of $60 a year. If market yields increase shortly after the T-bond is issued, what happens to the bonds:
A) coupon rate?
B) price?
C) yield to maturity?
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Solution Summary
The solution explains how the coupon, price and yield on a treasury bond will change when market interest rate changes in approximately 89 words.
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A. Coupon Rate - Coupon rate remains fixed for the life of the bond and does not change.
B. Price - If ...
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