Finance_RelativeChange

This is a small program that calculates the relative change (in %) in the n-year spot rate if a n-year zero-coupon bond price moves from q% to (1+k%)q%, where q% is the quoted price.

Inputs and outputs

For this project, we have:

1. Inputs: n (year), q (the n-year zero-coupon bond price as % of par), k (the increment in bond price, also as % of par).
2. Output: the change in the n-year spot rate in %.

Usage

In MatLab, type

calculateChange(10,60,1)

Example

Assume n=10, q=60, k=1. Then the change in the n-year spot rate is −1.9971%.