Question
Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 13 years to
Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 8 percent. Use financial calculator. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (Negative amounts 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.) Percentage change in price of Bond J_________% Percentage change in price of Bond K_________% What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Bond J_______% Percentage change in price of Bond K _______%
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