Bond J is a 4.3 percent coupon bond. Bond S is a 14.3 percent coupon bond. Both
ID: 2697349 • Letter: B
Question
Bond J is a 4.3 percent coupon bond. Bond S is a 14.3 percent coupon bond. 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?
Bond J Percentage change in Price?
Bond S Percentage change in Price?
If interest rates suddenly fall by 3 percent instead, what is the percentage change in the price of these bonds?
Bond J Percentage change in Price?
Bond S Percentage change in Price?
Bond J is a 4.3 percent coupon bond. Bond S is a 14.3 percent coupon bond. Both bonds have eleven years to maturity, make semiannual payments, and have a YTM of 9.6 percent.
Explanation / Answer
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