Bond J has a coupon rate of 7 percent and Bond K has a coupon rate...

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Finance

Bond J has a coupon rate of 7 percent and Bond K has a couponrate of 13 percent. Both bonds have 12 years to maturity, makesemiannual payments, and have a YTM of 10 percent. If interestrates suddenly rise by 2 percent, what is the percentage pricechange of these bonds? (Negative amounts should be indicated by aminus sign. Do not round intermediate calculations and enter youranswers as a percent rounded to 2 decimal places, e.g., 32.16.)
Percentage change in price of Bond J % ???
Percentage change in price of Bond K % ???
What if rates suddenly fall by 2 percent instead? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.)
Percentage change in price of Bond J % ???
Percentage change in price of Bond K % ???

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3.8 Ratings (415 Votes)

suppose the par value of bond J K 1000 now the value of bond J 35PVIFA5 24 1000 PVIF524 351379910000310068 4829525 310068 79302 value of bond K 65PVIFA5 24 1000 PVIF524 651379910000310068 8969117 310068 120698 now calculation See Answer

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Bond J has a coupon rate of 7 percent and Bond K has a couponrate of 13 percent. Both bonds have 12 years to maturity, makesemiannual payments, and have a YTM of 10 percent. If interestrates suddenly rise by 2 percent, what is the percentage pricechange of these bonds? (Negative amounts should be indicated by aminus sign. Do not round intermediate calculations and enter youranswers as a percent rounded to 2 decimal places, e.g., 32.16.)Percentage change in price of Bond J % ???Percentage change in price of Bond K % ???What if rates suddenly fall by 2 percent instead? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.)Percentage change in price of Bond J % ???Percentage change in price of Bond K % ???