$5$ Homework i

Bond $J$ has a coupon rate of $4$ percent. The Bond $K$ has a coupon rate of $10$ percent. Both bonds have $12$ years to maturity, make semiannual payments, and have a YTM of $7$ percent.

a$.$ If interest rates suddenly rise by $2$ 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$.,32\mathrm{.}16.$

b$.$ What if rates suddenly fall by $2$ percent instead?

Note: Do not round intermediate calculations and enter your answers as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$