FIN – The current rate of inflation is 3% and the long term Treasury bonds

| August 14, 2017

The current rate of inflation is 3% and the long term Treasury bonds are yielding 7%. You estimate that the rate of inflation will increase to 6%.what do you expect to happen to long term bonds yields? Compute the effect of this estimated change in inflation on the price of a 15 year, 10% coupon bond with a current yield to maturity of 8%?

Order your essay today and save 30% with the discount code: ESSAYHELPOrder Now