Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 12 percent. both bottoms have 7 years to maturity, make semiannual payments, and have a YTM of 6 percent.

If Interest rates suddenly rise by 3 percent, what is the percentage price change of Bond J?

a. -16.08%

b. -16.06%

c. -15.08%

d. -14.08%

If interest rates suddenly rise by 3 percent, what is the percentage price change of Bond K?

a. -13.86%

b. -11.86%

c. 36.08%

d. -13.84%

If interest rates suddenly fall by 3 percent, what is the percentage price change of Bond J?

a. -16.10%

b. 19.78%

c. 19.80%

d. -25.56%

If interest rates suddenly fall by 3 percent, what is the percentage price change of Bond K?

a. -13.88%

b. 16.85%

c. 16.33%

d. 16.73%