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Bond J is a 3 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds have 15 years to mature, make annual
Bond J is a 3 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds have 15 years to mature, make annual coupon payments and have a YTM of 6 percent. If the interest rate rise by 2 percent, what will be the percentage change in the price of these bonds? What does this tell you about the interest rate risk on a lower coupon bond?
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