What if rates suddenly fall by two percent instead, Finance Basics

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What if rates suddenly fall by two percent instead

Problem

Bond J has a coupon rate of 4 percent. Bonk K has a coupon rate of 14 percent. Both bonds have 17 years to maturity, a par value of $1,000, and a YTM of 8 percent, and both make semiannual payments. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? What if rates suddenly fall by 2 percent instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?

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Finance Basics: What if rates suddenly fall by two percent instead

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