Bond J has a coupon of 5.6 percent. Bond K has a coupon of 9.6 percent. Both bonds have 15 years to maturity and have a YTM of 5.9 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Bond J Bond K %A in Price -15.81 %

Bond J has a coupon of 5.6 percent. Bond K has a coupon of 9.6 percent. Both bonds have 15 years to maturity and have a YTM of 5.9 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Bond J Bond K %A in Price -15.81 %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Bond C has a coupon of 5.2 percent. Bond D has a coupon of 9.2 percent. Both bonds have 15 years to maturity and have a YTM of 7.4 percent. a. If interest rates suddenly rise by 1.6 percent, what is the percentage price change of these bonds? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. If interest rates suddenly fall by 1.6 percent, what is the percentage price change of these bonds? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c- What is your conclusion?
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