Question
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity,
Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?
1.Percentage change in price of Bond ?????J%
2.Percentage change in price of Bond ?????K%
| What if rates suddenly fall by 2 percent instead? 3.Percentage change in price of Bond ?????J% 4.Percentage change in price of Bond ?????K%
|
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Handbook Of Income Distribution Volume 2A
Authors: Anthony B. Atkinson, Francois Bourguignon
1st Edition
0444594280, 978-0444594280
