Award: 7.14 points Problem 7-18 Interest Rate Risk (LO2) Bond J is a 4.9% coupon bond. Bond K is a 10.9% coupon bond. Both bonds have 15 years to maturity, make semiannual payments and have a YTM of 7.9%. (Do not round intermediate calculations. Negative answers should be indicated by a minus sign. Round the final answers to 2 decimal places.) If interest rates suddenly rise by 2%, what is the percentage price change of these bonds? Percentage change in price of Bond J Percentage change in price of Bond K % What if rates suddenly fall by 2% instead? Percentage change in price of Bond J Percentage change in price of Bond K % % References Worksheet Problem 7-18 Interest Rate Risk (LO2) Learning Objective: 07-02 Bond values and yields, and why they fluctuate 2020 McGra All rights reserved