Both Bond Sam and Bond Dave have 6.5 percent coupons, 6.5 percent YTMs, make semi-annual payments, and are initially priced at par value. However, Bond Sam has 3 years to maturity, whereas Bond Dave has 20 years to maturity.

A. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam? Of Bond Dave?

B. If interest rates suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then? Of Bond Dave?

C. What do these results tell you about the interest-rate risk of longer-term bonds?