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Both Bond Sam and Bond Dave have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are currently oriced at the par value
Both Bond Sam and Bond Dave have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are currently oriced at the par value of $1,000. Bond Sam has two years to maturity, whereas the Bond Dave has 15 years to maturity. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of each bond? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of each bond? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Both Bond Sam and Bond Dave have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are currently oriced at the par value of $1,000. Bond Sam has two years to maturity, whereas the Bond Dave has 15 years to maturity. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of each bond? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of each bond? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16
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