Bond J has a coupon of 6.4 percent. Bond K has a coupon of 10.4 percent. Both bonds have 20 years to maturity and have a YTM of 7.8 percent. a. If interest rates suddenly rise by 1.2 percent, what is the percentage price change of these bonds? Note: 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 % % b. If interest rates suddenly fall by 1.2 percent, what is the percentage price change of these bonds? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. %A in Price Bond J % Bond K %

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
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Bond J has a coupon of 6.4 percent. Bond K has a coupon of 10.4 percent. Both bonds have 20 years to maturity and have a YTM of
7.8 percent.
a. If interest rates suddenly rise by 1.2 percent, what is the percentage price change of these bonds?
Note: 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
%
%
b. If interest rates suddenly fall by 1.2 percent, what is the percentage price change of these bonds?
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
%A in Price
Bond J
%
Bond K
%
Transcribed Image Text:Bond J has a coupon of 6.4 percent. Bond K has a coupon of 10.4 percent. Both bonds have 20 years to maturity and have a YTM of 7.8 percent. a. If interest rates suddenly rise by 1.2 percent, what is the percentage price change of these bonds? Note: 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 % % b. If interest rates suddenly fall by 1.2 percent, what is the percentage price change of these bonds? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. %A in Price Bond J % Bond K %
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