Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Please show the calculation in mathematical formula (no excel please). 

31. Bond ratings (S3.6) A bond's credit rating provides a guide to its price. In December 2020, Aaa bonds yielded 1.29% and Baa
bonds yielded 3.11%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what
would be the likely effect on the bond price? (Assume annual coupons.)
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Transcribed Image Text:31. Bond ratings (S3.6) A bond's credit rating provides a guide to its price. In December 2020, Aaa bonds yielded 1.29% and Baa bonds yielded 3.11%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what would be the likely effect on the bond price? (Assume annual coupons.)
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