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Both Bond Sam and Bond Dave have 9 percent coupons, makesemiannual payments, and are priced at par value. Bond Sam has 2years to maturity, whereas Bond Dave has 12 years to maturity. (Donot round your intermediate calculations.)Requirement 1: (a) If interest rates suddenly rise by 5 percent,what is the percentage change in the price of Bond Sam?(b) If interest rates suddenly rise by 5 percent, what is thepercentage change in the price of Bond Dave?Requirement 2: (a) If rates were to suddenly fall by 5 percentinstead, what would the percentage change in the price of Bond Sambe then?(b) If rates were to suddenly fall by 5 percent instead, whatwould the percentage change in the price of Bond Dave be then?
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