Bond j is a 4 percent coupon bond bond k is a 9 percent


Bond J is a 4 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 7 percent.

a) If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond J?

b) If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond K?

c) If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond J?

d) If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond K?

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Financial Management: Bond j is a 4 percent coupon bond bond k is a 9 percent
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