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Bond J has a coupon rate of 6 percent. Bond K has a coupon rate of...

Bond J has a coupon rate of 6 percent. Bond K has a coupon rate of 10 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 7 percent.

  

If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond J?

  • -19.16%

  • -19.18%

  • -17.18%

  • -18.18%

  

If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond K?

  • 32.91%

  • -17.57%

  • -15.57%

  • -17.55%

  

If interest rates suddenly fall by 3 percent, what is the percentage price change of Bond J?

  • -24.92%

  • 25.25%

  • 25.23%

  • -19.20%

  

If interest rates suddenly fall by 3 percent, what is the percentage price change of Bond K?

  • 22.74%

  • 22.86%

  • 1.00%

  • -17.59%

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Expert Solution

jeff jeffy answered 3 years ago
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