What is the current price of these bonds if the interest, Financial Management

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What is the current price of these bonds if the interest

Bond A Bond B

Coupon Rate 5% 14%

Years-to-Maturity 10 10

Yield-to-Maturity 7% 7%

Interest Payments Semi- Semi-

Annual Annual

A] What is the current price of these bonds?

B] If the interest rates rise by 2%, what is the percentage price change of these bonds?

C] If the interest rates fall by 2%, what is the percentage price change of these bonds?

D] What does this problem tell you about the interest rate risk of lower-coupon bonds?

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