What would be the percentage change in the price

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Question: Both Bond Sam and Bond Dave have 9.2 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 21 years to maturity. Both bonds have a par value of 1,000.

If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?

Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.

If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds?

Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places

Reference no: EM133269829

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