If interest rates suddenly rise by 1 percent what is the


Question: Both bond A and bond B have 6.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while bond B has 15 years to maturity.

a. If interest rates suddenly rise by 1 percent, what is the percentage change in price of bond A and bond B? (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Bond A %

Bond B %

b. If interest rates suddenly fall by 1 percent instead, what would be the percentage change in price of bond A and bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Bond A %

Bond B %

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Finance Basics: If interest rates suddenly rise by 1 percent what is the
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