Bond a has a coupon rate of 4 bond b has a coupon rate of, Financial Management

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Bond a has a coupon rate of 4 bond b has a coupon rate of

Bond A has a coupon rate of 4%. Bond B has a coupon rate of 14%. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8%. If interest rates suddenly rise by 2%, what is the percentage price change of these bonds? What if rates suddenly fall by 2% instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?

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