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[answered] Bond J is a 4 percent coupon bond. Bond K is a 11 percent c


Bond J is a 4 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 8 years to maturity, make semiannual payments, and have a YTM of 7 percent.


Requirement 1:
(a) If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J?
? ?
? (Click to select)-10.15%14.21%-11.15%-12.15%-12.13%
(b) If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K?
? ?
? (Click to select)28.14%12.08%-10.43%-8.43%-10.41%
Requirement 2:
(a) If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J?
? ?
? (Click to select)-12.17%-28.09%14.19%14.17%7.53%
(b) If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K?
? ?
? (Click to select)-39.17%11.94%12.23%12.06%-10.45%

 


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