Question
Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. Both bonds have 15 years to
| Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. Both bonds have 15 years to maturity, make semiannual payments, and have a YTM of 9 percent. |
| 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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Basic Finance An Introduction to Financial Institutions Investments and Management
Authors: Herbert B. Mayo
10th edition
1111820635, 978-1111820633
