Bond J has a coupon rate of 4.3 percent. Bond S has a coupon rate of 14.3 percen
ID: 1191564 • Letter: B
Question
Bond J has a coupon rate of 4.3 percent. Bond S has a coupon rate of 14.3 percent. Both bonds have eleven years to maturity, make semiannual payments, and have a YTM of 9.6 percent.
If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?(Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)
If interest rates suddenly fall by 3 percent instead, what is the percentage change in the price of these bonds? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Bond J has a coupon rate of 4.3 percent. Bond S has a coupon rate of 14.3 percent. Both bonds have eleven years to maturity, make semiannual payments, and have a YTM of 9.6 percent.
Requirement 1:If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?(Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16).)
Percentagechange in price Bond J % Bond S % Requirement 2:
If interest rates suddenly fall by 3 percent instead, what is the percentage change in the price of these bonds? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Percentagechange in price Bond J % Bond S %
Explanation / Answer
When interest rate rises When interest rate rises Percentage change in price Percentage change in price Bond J 61.17% Bond J 34.15% BondS 45.93% BondS 27.51%