Question
Bond A and Bond B have 7% coupons and are priced at par value. Bond A has 3 years to maturity whereas Bond B has
Bond A and Bond B have 7% coupons and are priced at par value. Bond A has 3 years to maturity whereas Bond B has 20 years to maturity. If interest rates suddenly rise by 2%, what is the percentage change in the price of Bonds A and B?
Please show what formula to use and steps.
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Financial Literacy For Managers
Authors: Richard A. Lambert
1st Edition
1613630182, 978-1613630181
