The bonds of their price volatility

Reference no: EM13773228

Compute the duration for bond C, and rank the bonds of their price volatility. The current rate of interest is 8%, so the prices of bonds A and B are 1000dollars and 1268dollars respectively.
Bond A Bond B Bond C
Coupon - 8% coupon-12% coupon-8%
Term-10years term - 10years term -5years
Duration - 7.25 duration -6.74 duration-?
confirm your ranking by calculating the percentage change of each bond when interest rates rise from 8 to 12 percent if prices become 774dollars and 1000, respectively

Reference no: EM13773228

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