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Bond J is a 4 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 7 years to maturity, make semiannual
| Bond J is a 4 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 7 years to maturity, make semiannual payments, and have a YTM of 8 percent. |
| Requirement 1: | |
| (a) | If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J? |
| (b) | If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K? |
| Requirement 2: | |
| (a) | If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J? |
| (b) | If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K? |
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Financial Intelligence An Entrepreneurs Guide Volume 1
Authors: Income Mastery
1st Edition
1647772648, 978-1647772642
