Bond J is a 7.4 percent coupon bond. Bond K is a 11.4 percent coupon bond. Both
ID: 2709068 • Letter: B
Question
Bond J is a 7.4 percent coupon bond. Bond K is a 11.4 percent coupon bond. Both bonds have 12 years to maturity and have a YTM of 7.8 percent.
If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
If interest rates suddenly fall by 2 percent, what is the percentage price change of these bonds? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
a.
If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Explanation / Answer
Bond J is a 7.4 percent coupon bond. Bond K is a 11.4 percent coupon bond. Both