Bond J has a coupon rate of 4.1 percent. Bond K has a coupon rate of 14.1
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Question:
Bond J has a coupon rate of 4.1 percent. Bond K has a coupon rate of 14.1 percent. Both bonds have nine years to maturity, a par value of $1,000, and a YTM of 9.2 percent, and both make semiannual payments.
a.If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?(A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b.If interest rates suddenly fall by 3 percent instead, what is the percentage change in the price of these bonds?(Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
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