Bond J is a 3.7% coupon bond. Bond K is a 9.7% coupon bond. Both bonds...

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	%

Solutions

Expert Solution

jeff jeffy answered 1 year ago

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