Bond x is a 5 percent coupon bond bond y is a 10 percent, Ask an Expert

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Bond X is a 5 percent coupon bond. Bond Y is a 10 percent coupon bond. Both bonds have 8 years to maturity, make semiannual payments, and have a yield to maturity of 10 percent. If the interest rate suddenly falls by 1 percent, what is the percentage price change of these bonds? What about if the interest rate rises by 1 percent? What does this problem tell you about interest rate risk of lower-coupon bonds? Please show your work.

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