5. Interest Rate Risk Collapse . Both Bonds A and B are priced at par since their YTMs are the same as their coupon rate of 7%. What happens to their prices if interest rate in the market rises by 2%? What if the interest rate falls by 2%? Compute the prices in $ and also the percentage change.

Bond A:			Bond B:
Coupon rate	7%		Coupon rate	7%
Settlement date	1/1/2000		Settlement date	1/1/2000
Maturity date	1/1/2003		Maturity date	1/1/2020
Redemption (% of par)	100		Redemption (% of par)	100
# of coupons per year	2		# of coupons per year	2
YTM	7%