Interest Rate Risk. Bond J is a 5% coupon bond. Bond K is an 10% coupon bond. Both bonds have 12 years to maturity, make semiannual payments, and have a YTM of 5%.
If interest rates suddenly rise by 4% (YTM is now 9%), the percentage price change of bond J is______%.
If interest rates suddenly rise by 4% (YTM is now 9%), the percentage price change of bond K is______%.
If interest rates suddenly fall by 4% (YTM is now 1%), the percentage price change of bond J is______%.
If interest rates suddenly fall by 4% (YTM is now 1%), the percentage price change of bond K is______%.