Bond J is a 4 percent coupon bond. Bond K is a 10 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 4 percent, what is the percentage price change of Bond J?

(b) If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond K?

Requirement 2:

(a) If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond J?

(b) If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond K?