Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 2 years to maturity, whereas Bond Dave has 12 years to maturity. (Do not round your intermediate calculations.)
Requirement 1: (a) If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam?
(b) If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave?
Requirement 2: (a) If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then?
(b) If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Dave be then?