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Both Bond A and Bond B have 10 percent coupons and are priced at par value. Bond A has 10 years to maturity, while Bond
Both Bond A and Bond B have 10 percent coupons and are priced at par value. Bond A has 10 years to maturity, while Bond B has 20 years to maturity. a. If interest rates suddenly rise by 1 percent, what is the percentage change in price of Bond A and B ond B ? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. b. If interest rates suddenly fall by 1 percent instead, what would be the percentage change in price of Bond A and Bond B ? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct
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