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Problem 5-18 Interest Rate Risk Bond J has a coupon rate of 3 percent. The Bond K has a coupon rate of 9 percent. Both

image text in transcribed Problem 5-18 Interest Rate Risk Bond J has a coupon rate of 3 percent. The Bond K has a coupon rate of 9 percent. Both bonds have 16 years to maturity, make semiannual payments, and have a YTM of 6 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16 . b. What if rates suddenly fall by 2 percent instead? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16

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