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What is the percentage change in the price of these bonds

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Reference no: EM132910359

Question - The Faulk Corp. has a bond with a coupon rate of 6 percent outstanding. The Yoo Company has a bond with a coupon rate of 12 percent outstanding. Both bonds have 20 years to maturity, make semiannual payments, and have a YTM of 9 percent.

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

What if interest rates suddenly fall by 2 percent instead?

Reference no: EM132910359

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