QUESTION
Bond A has 4 years left to maturity and Bond B has 8 years left
to maturity. They both have a 6% coupon rate, pays semiannually,
and yield is 5%. Calculate the percentage change in the price of
each bond if interest rates suddenly increased by 2%.
A: -7.27%, B: -13.38%
A: -6.78%, B: -11.80%
A: 7.27%, B 13.38%
A: 6.78%, B: 11.80%
None of the above
QUESTION
What does the problem above tell you about interest rate...