Question
Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel,
| Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has five years to maturity, whereas the Hardy Corp. bond has 18 years to maturity. |
| If interest rates suddenly rise by 2 percent, what is the percentage change in the price of each bond? |
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Risk Management And Financial Institutions
Authors: John Hull
1st Edition
0132397900, 9780132397902
