Interest rate risk of lower-coupon bonds


Bond J is a 4% coupon bond. Bond K is a 12% coupon bond. Both bonds have nine years to maturity, make semiannual payments, and have a YTM of 8%. If interest rates suddenly rise by 2%, what is the percentage price change of these bonds? What if rates suddenly fall by 2% instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?

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Finance Basics: Interest rate risk of lower-coupon bonds
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