In: Finance
Bond J is a 3.7% coupon bond. Bond K is a 9.7% coupon bond. Both bonds have 15 years to maturity, make semiannual payments and have a YTM of 6.7%.
If interest rates suddenly rise by 2%, what is the percentage price change of these bonds?
Percentage change in price of Bond J | % |
Percentage change in price of Bond K | % |
What if rates suddenly fall by 2% instead?
Percentage change in price of Bond J | % |
Percentage change in price of Bond K | % |