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Question: Both bond A and bond B have 9.6 percent coupons and are priced at par value. Bond A has 8 years to maturity, while bond B has 20 years to maturity.

a. If interest rates suddenly rise by 2.2 percent, what is the percentage change in price of bond A and bond B? (Negative answers 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.) Bond A % Bond B %

b. If interest rates suddenly fall by 2.2 percent instead, what would be the percentage change in price of bond A and bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Bond A % Bond B %

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Basic Finance, Finance

Category:- Basic Finance
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