Question
Bond J is a 3.7% coupon bond. Bond K is a 9.7% coupon bond. Both bonds have 15 years to maturity, make semiannual payments and
Bond J is a 3.7% coupon bond. Bond K is a 9.7% coupon bond. Both bonds have 15 years to maturity, make semiannual payments and have a YTM of 6.7%.
If interest rates suddenly rise by 2%, what is the percentage price change of these bonds?
| Percentage change in price of Bond J | % |
| Percentage change in price of Bond K | % |
What if rates suddenly fall by 2% instead?
| Percentage change in price of Bond J | % |
| Percentage change in price of Bond K | % |
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
18th edition
1260190080, 1260190083, 978-1259917059
