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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 4 years to
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 18 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam? 6.69% O-6.58% O-7.06% 0-6.60% If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave? -17.65% 0-17.67% 0-21.46% O 19.07% If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then? 6.69% -6.55% 7.15% 7.17% If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Dave be then? 23.54% O 23.56% 19.07% 0-17.62%
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