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Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 2 years to
Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 2 years to maturity, whereas Bond Dave has 11 years to maturity. If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam? -7.36% -6.85% -6.83% 7.00% If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? 25.11% -29.99% -23.07% -23.05% If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then? 7.00% -6.80% 7.50% 7.52% If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then? 33.53% 33.51% -23.02% 25.11%
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