What if interest rates suddenly fall by 2 percent instead

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Reference no: EM13327237

My employer has a 9 percent bond outstanding. Both bonds have 13 years to maturity, make semiannual interest payments, and have a YTM of 6 percent.

a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

b. What if interest rates suddenly fall by 2 percent instead?

Reference no: EM13327237

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