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Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to
Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 10 years to maturity. a) If interest rates suddenly rise by 1 percent, what is the percentage change in the price of Bond Sam? b) If interest rates suddenly rise by 1 percent, what is the percentage change in the price of Bond Dave? c) If interest rates suddenly fall by 1 percent instead, what is the percentage change in the price of Bond Sam? d) If interest rates suddenly fall by 1 percent instead, what is the percentage change in the price of Bond Dave? Bond J is a 6 percent coupon bond. Bond K is a 12 percent coupon bond. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8 percent. a) If interest rates suddenly rise by 1 percent, what is the percentage price change of Bond J? b) If interest rates suddenly rise by 1 percent, what is the percentage price change of Bond K? c) If interest rates suddenly fall by 1 percent instead, what is the percentage price change of Bond J? d) If interest rates suddenly fall by 1 percent instead, what is the percentage price change of Bond K
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