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4.Suppose there are two Bonds, Bond X and Bond Y. Both bonds have 9% coupons, make semi-annual payments, and are priced initially at face value
4.Suppose there are two Bonds, Bond X and Bond Y. Both bonds have 9% coupons, make semi-annual payments, and are priced initially at face value (\$1000). Bond X has 3 years left to maturity, whereas Bond Y has 20 years left to maturity. Suppose that interest rates rise, what will happen to the prices of both bonds? This is a conceptual question, I do not want numbers. You can use the equation for the calculating the value of the bond to help you explain this. Which bonds' price will change by more? What concept is this illustrating? Include a definition of the concept in your
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