Bond J has a coupon rate of 5 percent Bond K has a coupon rate of 8 percent Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 7 percent If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J 13 74 12 76 13 76 11 76 If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K 12 71 12 69 10 71 18 95 If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J 16 55 13 78 16 57 26 02 If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K 15 08 5 50 15 20 12 73 Could you please try to solve this by explaining this process (NOT IN EXCEL ) As I am trying to solve using Financial calculator so would be helpful If I could see the value to input in calculator Appreciate it

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 19, 2024

Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of 8 percent. Both bonds have 10 years to maturity,

Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of 8 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 7 percent.

	If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J?

	-13.74% -12.76% -13.76% -11.76%

	If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K?

	-12.71% -12.69% -10.71% 18.95%

	If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J?

	16.55% -13.78% 16.57% -26.02%

	If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K?

	15.08% -5.50% 15.20% -12.73%

Could you please try to solve this by explaining this process. (NOT IN EXCEL ) As I am trying to solve using Financial calculator so would be helpful If I could see the value to input in calculator. Appreciate it