Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both bonds have 20 years to maturity, make semiannual payments, and have a YTM of 10 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, a. b. e.g., 32.16.) a. Bond J Bond K b. Bond J Bond K 96
Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both bonds have 20 years to maturity, make semiannual payments, and have a YTM of 10 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, a. b. e.g., 32.16.) a. Bond J Bond K b. Bond J Bond K 96
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
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![Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both
bonds have 20 years to maturity, make semiannual payments, and have a YTM of 10
percent.
If interest rates suddenly rise by 2 percent, what is the percentage price change of
these bonds? (A negative answer should be indicated by a minus sign. Do not
round intermediate calculations and enter your answers as a percent rounded to
2 decimal places, e.g., 32.16.)
b.
a.
What if rates suddenly fall by 2 percent instead? (Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places,
e.g., 32.16.)
a.
Bond J
Bond K
b.
Bond J
Bond K](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F96367b51-7a35-48ec-b113-14c01f601e4a%2F4cb52c98-ce58-4b59-9273-e3af155b3b84%2Fl54jbh6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. Both
bonds have 20 years to maturity, make semiannual payments, and have a YTM of 10
percent.
If interest rates suddenly rise by 2 percent, what is the percentage price change of
these bonds? (A negative answer should be indicated by a minus sign. Do not
round intermediate calculations and enter your answers as a percent rounded to
2 decimal places, e.g., 32.16.)
b.
a.
What if rates suddenly fall by 2 percent instead? (Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places,
e.g., 32.16.)
a.
Bond J
Bond K
b.
Bond J
Bond K
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