Two bonds have the following criteria:
a. b.
6% coupon 13% coupon
11 yrs to maturity 11 years to maturity
semi annual payments semi annual payments
YTM 9.5% YTM 9.5%
1) If interest rates rise by 1% what is the % change in the price of each bond?
2) If interest rates rise by 4% what is the % change in the price of each bond?