Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, whereas Bond Dave has 18 years to maturity. If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam?

multiple choice 1

-15.44%

15.93%

-18.26%

-15.42%

If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave?

multiple choice 2

-49.46%

-33.09%

-33.07%

37.58%

If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then?

multiple choice 3

15.93%

18.94%

-15.39%

18.92%

If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then?

multiple choice 4

37.58%

60.20%

60.22%

-33.04%