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Interest Rate Risk Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 1

Interest Rate RiskBond J has a coupon rate of 3 percent. Bond K has acoupon rate of 9 percent. Both bonds have 18 years to maturity, make semiannualpayments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent,what is the percentage price change of these bonds? What if rates suddenly fall by 2percent instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?

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