The faulk corp has a bond with coupon rate of 57 percent, Ask an Expert

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The faulk corp. has a bond with coupon rate of 5.7 percent outstanding. The Gonas company has a bond with a coupon rate of 12.3 percent outstanding. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 9 percent. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? what if interest rates fall by 2 percent instead? what does this problem tell you about the interest rate risk of lower coupon bonds?

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Financial Management, Finance

Category:- Financial Management
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