Consider two bonds with $1,000 face values that carry coupon rates of 8 , make annual coupon payments, and exhibit similar risk characteristics The first bond has 5 years to maturity whereas the second has 10 years to maturity The appropriate discount rate for investments of similar risk is 8 If th...

Prior to the increase in the discount rate the market value of both ...

Consider two bonds with $1,000 face values that carry coupon rates of 8%, make annual coupon payments,

Question:

Consider two bonds with $1,000 face values that carry rates of 8%, make annual payments, and exhibit similar risk characteristics. The first bond has 5 years to whereas the second has 10 years to The appropriate for investments of similar risk is 8%. If this rises by two percentage points, what will be the respective percentage price changes of the two bonds?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...