Both Bond A and Bond B have 7 % coupons, are priced at par value, and...

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Finance

Both Bond A and Bond B have 7 % coupons, are priced at parvalue, and make semiannual payments. Bond A has 5 years tomaturity, whereas Bond B has 15 years to maturity.
A) If interest rates suddenly rise by 4 percent, what is thepercentage change in the price of Bond A?
B) If interest rates suddenly rise by 4 percent, what is thepercentage change in the price of Bond B?
C) If rates were to suddenly fall by 4 percent instead, whatwould the percentage change in the price of Bond A be then?
D) If rates were to suddenly fall by 4 percent instead, whatwould the percentage change in the price of Bond B be then?

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Answer A Bond A Face Value 1000 Semiannual coupon 1000 72 35 Time to maturity 5 years 10 semiannual periods Current Price Priced at par 1000 Current interest rate 7 Interest rates suddenly rise by 4 percent 7 4 11 Price will be See Answer

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Both Bond A and Bond B have 7 % coupons, are priced at parvalue, and make semiannual payments. Bond A has 5 years tomaturity, whereas Bond B has 15 years to maturity.A) If interest rates suddenly rise by 4 percent, what is thepercentage change in the price of Bond A?B) If interest rates suddenly rise by 4 percent, what is thepercentage change in the price of Bond B?C) If rates were to suddenly fall by 4 percent instead, whatwould the percentage change in the price of Bond A be then?D) If rates were to suddenly fall by 4 percent instead, whatwould the percentage change in the price of Bond B be then?