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Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 19 years to maturity, make semiannual payments, and have a YTM of 8 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? What if rates suddenly fall by 2 percent instead?
1. assume that you were a manager of a large department in a company and you received a request from your supervisors
Higher interest rates can be caused by
1. if a firm raises capital by selling new bonds it would be called the issuing firm and the coupon rate is usually set
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