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What is the percent change in bond prices

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Both Bond James and Bond Jason have 6.5% coupons, make semiannual payments, and are priced at par value. James has 5 years to maturity whereas Jason matures in 12 years.

If interest rates rise by 2.5%, what is the percent change in bond prices?

If interest rates fall by 2.5%, what is the percent change in bond prices?

Which bond is more sensitive to change in interest rates?

(Calculate bond prices to support your answer.)

Reference no: EM133068755

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