Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 13 years to maturity. If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam? O 16.06% O-15.52% O-15.50% O-18.38% If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Dave?

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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nces
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments,
and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has
13 years to maturity.
If interest rates suddenly rise by 5 percent, what is the percentage change in the price
of Bond Sam?
O 16.06%
O-15.52%
O-15.50%
O-18.38%
If interest rates suddenly rise by 5 percent, what is the percentage change in the price
of Bond Dave?
O-32.49%
O-48.17%
O-32.51%
O 36.30%
Transcribed Image Text:nces Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 13 years to maturity. If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam? O 16.06% O-15.52% O-15.50% O-18.38% If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Dave? O-32.49% O-48.17% O-32.51% O 36.30%
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