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Both Bond Sam and Bond Dave have 6 percent coupons, make semlannual payments, and are priced at par value. Bond Sam has five years to
Both Bond Sam and Bond Dave have 6 percent coupons, make semlannual payments, and are priced at par value. Bond Sam has five years to maturity, whereas Bond Dave has 18 years to maturity. a. If Interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (A negatlve answer should be Indlcated by a minus sign. Do not round Intermedlate calculatlons 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 Bond Sam and Bond Dave? (Do not round Intermedlate calculatlons and enter your answers as a percent rounded to 2 declmal places, e.g., 32.16.)
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