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Bond Sam and Bond Dave both have 8 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. Bond Sam
Bond Sam and Bond Dave both have percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. Bond Sam bond has four years to maturity, whereas the Bond Dave bond has years to maturity.
aIf interest rates suddenly rise by percent, what is the percentage change in the price of these bonds? A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to decimal places, eg
Percentage change in price of Bond Sam
Percentage change in price of Bond Dave
b If interest rates were to suddenly fall by percent instead, what would the percentage change in the price of these bonds be then? Do not round intermediate calculations and enter your answers as a percent rounded to decimal places, eg
Percentage change in price of Bond Sam
Percentage change in price of Bond Dave
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