What is percentage price change of bond

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Reference no: EM131972444

Bond J is a 4 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 8 years to maturity, make semiannual payments, and have a YTM of 8 percent.

Requirement 1:

(a) If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond J?

(b) If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond K?

Requirement 2:

(a) If interest rates suddenly fall by 3 percent, what is the percentage price change of Bond J?

(b) If interest rates suddenly fall by 3 percent, what is the percentage price change of Bond K?

Reference no: EM131972444

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