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1. Are bond prices are equally sensitive to the same percentage increases or decreases of the market interest rate (YTM)? Explain and use an example
1. Are bond prices are equally sensitive to the same percentage increases or decreases of the market interest rate (YTM)? Explain and use an example of: Market interest rate increases, say, from 5% to 6% and decreases from 5% to 4%).
2A Explain the impact of coupon amounts (example use: $30 coupon vs. $$85 coupon) on the interest rate sensitivity of a bond.
2B if the market interest rate changes, which bond's price will change more, the one with the low or high coupon? (assuming other things are identical.) Explain why?
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