At market interest rate level of 2%, a ten-year and a 30-year bond ( both with 8% coupon rates and semiannual payment ) are selling at the prices $1,541.37 and $2,348.65, respectively. If you expected that interest rate will jump to 10% from the current level, which bond is risker and which bond is more profitable if interest rate drop significantly

30 year Bond ,  30 year Bond

Explanation:

Market interest rate = 2%

Coupon rates for both ten-year bond and 30-year coupon bound = 8%

semi-annual payments : $1541.37 , $2348.65  respectively

Determine which bond is riskier

Assuming interest rate rise to 10%

Given that both both bonds have the same Coupon rate but the semiannually payments are different ( i.e. Ten year bond = $1541.37 , 30-year Bond = $2348.65 )

The riskier Bond will be the Riskier Bond , The more profitable Bond if the interest rate drop drastically will be 30 year Bond as well

x=3

step-by-step explanation:

this is really simple i saw that there was only one term (5x) and thought if that was 15 what would i have to multiply everything else to get it there? well if 5x became 15 then x would have to be 3 so plug the 3 in the x for the other equations and you get 15 for the other ones. so there you go. : )