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Both Bond A and Bond B have 7.8 percent coupons and are priced at par value. Bond A has 9 years to maturity, while Bond
Both Bond A and Bond B have 7.8 percent coupons and are priced at par value. Bond A has 9 years to maturity, while Bond B has 16 years to maturity. . a. If interest rates suddenly rise by 2.2 percent, what is the percentage change in price of Bond A and Bond 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.) %Air Orice Bond A Bond B (17.21) % b. If interest rates suddenly fall by 2.2 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.) in Price Bond A Bond B 22.86 % Problem 10-18 Interest Rate Risk (LO3, CFA4) Bond J has a coupon of 7.4 percent. Bond K has a coupon of 11.4 percent. Both bonds have 12 years to maturity and have a YTM of 7.8 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (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.) %A in Price Bond J Bond K b. If interest rates suddenly fall by 2 percent, what is the percentage price change of these bonds? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) %A in Price Bond J Bond K
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