Both Bond Sam and Bond Dave have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 21 years to maturity. Both bonds have a par value of 1,000. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? Note: 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. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Percentage change in price b. Percentage change in price D Bond Sam % % Bond Dave % %
Both Bond Sam and Bond Dave have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 21 years to maturity. Both bonds have a par value of 1,000. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? Note: 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. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Percentage change in price b. Percentage change in price D Bond Sam % % Bond Dave % %
![Both Bond Sam and Bond Dave have 12.2 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4
years to maturity, whereas Bond Dave has 21 years to maturity. Both bonds have a par value of 1,000.
a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?
Note: 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. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
a. Percentage change in price.
b. Percentage change in price
Bond Sam
%
Bond Dave
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F786a2b18-36fc-4a59-90dc-399df5403cec%2F847369c8-4d58-4031-a86b-bb781b1d587a%2F6ma8e2r_processed.jpeg&w=3840&q=75)
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