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Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, whereas Bond Dave has 12 years to maturity. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of Bond Sam? -13.10% 11.87% -11.58% -11.56% If interest rates suddenly rise by 3 percent, what is the percentage change in the price of Bond Dave? -20.70% -20.68% -26.10% 22.10% If rates were to suddenly fall by 3 percent instead, what would the percentage change in the price of Bond Sam be then? -11.53% 11.87% 13.45% 13.47% If rates were to suddenly fall by 3 percent instead, what would the percentage change in the price of Bond Dave be then? 28.35% -20.65% 22.10% 28.37%
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