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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 2 years to
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 2 years to maturity, whereas Bond Dave has 14 years to maturity. If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam? 7.16% 0 -7.54% O-6.99% 0 -7.01% If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? -28.24% O 31.25% 0-28.22% 0-39.36% If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then? -6.96% 7.69% 7.16% O 7.71% If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then? 0-28.19% 45.45% 31.25% O45.43%
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