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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 15 years to maturity. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of Bond Sam? 5.62%5.30%5.32%5.40% If interest rates suddenly rise by 3 percent, what is the percentage change in the price of Bond Dave? 29.97%25.15%23.04%23.06% If rates were to suddenly fall by 3 percent instead, what would the percentage change in the price of Bond Sam be then? 5.40%5.69%5.27%5.71% If rates were to suddenly fall by 3 percent instead, what would the percentage change in the price of Bond Dave be then? 33.57%23.01%33.59%25.15%
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