In: Finance
Bond J has a coupon of 4.2 percent. Bond K has a coupon of 8.2 percent. Both bonds have 10 years to maturity and have a YTM of 6 percent.
a. If interest rates suddenly rise by 1 percent, what is the percentage price change of these bonds?
Bond J:
Bond K:
b. If interest rates suddenly fall by 1 percent, what is the percentage price change of these bonds?
Bond J:
Bond K: