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7. a. Using the information in the following table, calculate the projected price change for Bond… 1 answer below » 7. a. Using the information in the following table, calculate the projected price change for Bond B if the yield to maturity for this bond falls by 75 basis points. b. Describe the shortcoming of analyzing Bond A strictly to call or to maturity. Explain an approach to remedy this shortcoming. LAUREN CORPORATION BOND INFORMATION (AS OF 2012) View complete question » Bond A (Callable) Bond B (Noncallable) Maturity 2022 2022 Coupon 11.50% 7.25% 7. a. Using the information in the following table, calculate the projected price change for Bond B if the yield to maturity for this bond falls by 75 basis points. b. Describe the shortcoming of analyzing Bond A strictly to call or to maturity. Explain an approach to remedy this shortcoming. LAUREN CORPORATION BOND INFORMATION (AS OF 2012) Bond A (Callable) Bond B (Noncallable) Maturity 2022 2022 Coupon 11.50% 7.25% Current price 125.75 100.00 Yield to maturity 7.70% 7.25% Modified duration to maturity 6.20 6.80 Convexity to maturity 0.50 0.60 Call date 2016 — Call price 105 — Yield to call 5.10% — Modified duration to call 3.10 — Convexity to call 0.10 — View less » Dec 29 2015 10:57 AM
