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Problem 10-17 Interest Rate Risk (LO3, CFA4) Both Bond A and Bond B have 9.4 percent coupons and are priced at par value. Bond A

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Problem 10-17 Interest Rate Risk (LO3, CFA4) Both Bond A and Bond B have 9.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while Bond B has 20 years to maturity. a. If interest rates suddenly rise by 2 percent, what is the percentage change in price of Bond A and B ond 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.) b. If interest rates suddenly fall by 2 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Problem 10-17 Interest Rate Risk (LO3, CFA4) Both Bond A and Bond B have 9.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while Bond B has 20 years to maturity. a. If interest rates suddenly rise by 2 percent, what is the percentage change in price of Bond A and B ond 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.) b. If interest rates suddenly fall by 2 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

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