If interest rates suddenly rise by 2 percent what is the


Bond J has a coupon rate of 4 percent. Bond S has a coupon rate of 14 percent. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 8 percent.

If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

If interest rates suddenly fall by 2 percent instead, what is the percentage change in the price of these bonds?

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Financial Management: If interest rates suddenly rise by 2 percent what is the
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