Percentage change in the price of bond

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Reference no: EM131056700

Laurel, Inc., and Hardy Corp. both have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has four years to maturity, whereas the Hardy Corp. bond has 19 years to maturity.

If interest rates suddenly rise by 2 percent, what is the percentage change in the price of each bond? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).)

  • Percentage change in price of Laurel, Inc., bond %
  • Percentage change in price of Hardy Corp. bond %

If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).)

  • Percentage change in price of Laurel, Inc., bond %
  • Percentage change in price of Hardy Corp. bond

Reference no: EM131056700

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