Both bond a and bond b have 74 percent coupons and are, Ask an Expert

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Both bond A and bond B have 7.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while bond B has 16 years to maturity.

a) Assume if interest rates suddenly rise by 1.8 percent, what is the percentage change in price of bond A and bond B? (Round your answer to 2 decimal places. Negative answers should be indicated by a minus sign. Omit the "%" sign in your response.)

Bond A %

Bond B %

b) Assume if interest rates suddenly fall by 1.8 percent instead, what would the percentage change in price of bond A and bond B? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Bond A %

Bond B %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92417731

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