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Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both have 12 years to maturity,
Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both have 12 years to maturity, both make semiannual payments, and both have a YTM of 10 percent.
a.) If interest rates suddenly rise by 2 percent, what's the percentage price change of these bonds?
b.) If rates suddenly fall by 2 percent instead?
Fill in the table with answers.
a.) | Bond J | ???? % |
a.) | Bond K | ???? % |
b.) | Bond J | ???? % |
b.) | Bond K | ???? % |
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