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  3. both bond a and bond b have 8.6 percent coupons an

Both Bond A and Bond B have 8.6 percent coupons and are priced at par...

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Finance

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Both Bond A and Bond B have 8.6 percent coupons and are priced at par value. Bond A has 8 years to maturity, while Bond B has 18 years to maturity. a. If interest rates suddenly rise by 1.2 percent, what is the percentage change in price of Bond A and Bond B? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. %A in Price Bond A 3.52 X % Bond B -9.97 % b. If interest rates suddenly fall by 1.2 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. %A in Price Bond A 7.05 X % Bond B 11.73 %

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