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Both Bond Bill and Bond Ted have 11.2 percent coupons, make semiannual payments, and are priced...

Both Bond Bill and Bond Ted have 11.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 4 years to maturity, whereas Bond Ted has 21 years to maturity. Both bonds have a par value of 1,000.
a.

If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?
b. If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds?

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jeff jeffy answered 3 years ago
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