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What is the percentage change in the price of Bond C and D

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Problem 1: Both Bond C and Bond D have 9 percent coupons, make semiannual payments, and are priced at par value. Bond C has 3 years to maturity, whereas Bond D has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond C? Of Bond D? If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond C be then? Of Bond D? Assuming the par value of both bonds is $1,000.

Reference no: EM132703137

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