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Problem 10-17 Interest Rate Risk (LO3, CFA4) Both Bond A and Bond B have 7.4 percent coupons and are priced at par value. Bond A
Problem 10-17 Interest Rate Risk (LO3, CFA4) Both Bond A and Bond B have 7.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while Bond B has 16 years to maturity. a. If interest rates suddenly rise by 1.8 percent, what is the percentage change in price of Bond A and Bond B? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) %A in Price Bond A Bond B
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