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Both Bond Sam and Bond Dave have 3 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to
Both Bond Sam and Bond Dave have percent coupons, make semiannual payments, and are priced at par value. Bond Sam has years to maturity, whereas Bond Dave has years to maturity.
a If interest rates suddenly rise by point, what is the percentage change in the price of Bond Sam?
b If interest rates suddenly rise by point, what is the percentage change in the price of Bond Dave?
c If interest rates suddenly fall by point instead, what is the percentage change in the price of Bond Sam?
d If interest rates suddenly fall by point instead, what is the percentage change in the price of Bond Dave?
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