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What is the percentage price change of bonds

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Interest rate risk. Bond J has a coupon rate of 4%. Bond S has a coupon rate of 14%. Both bonds have 17 years to maturity, $1000 face value, make half yearly payments and have a YTM of 8%. If interest rates suddenly rise by 2%, what is the percentage price change of these bonds? What if suddenly rates fall by 2% instead? What does this problem tell you about the interest rate risk of lower coupon rate bonds?

Reference no: EM133001121

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