Question: Both Bond Bill and Bond Ted have 10.6 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 6 years to maturity, whereas Bond Ted has 23 years to maturity. Both bonds have a par value of 1,000.
If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
|
Percentage
change in price |
| Bond Bill |
% |
| Bond Ted |
% |
|
If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds?(Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
|
Percentage
change in price |
| Bond Bill |
% |
| Bond Ted |
% |
|