Question
Both bond A and bond B have 6.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while bond
Both bond A and bond B have 6.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while bond B has 15 years to maturity. a. If interest rates suddenly rise by 1 percent, what is the percentage change in price of bond A and bond B? b. If interest rates suddenly fall by 1 percent instead, what would be the percentage change in price of bond A and bond B? (
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The Economics Of Money Banking And Finance
Authors: Peter Howells, Keith Bain
4th Edition
0273710397, 978-0273710394
