The Atticus Corp. has a 7 percent coupon bond outstanding. The Finch Company has an...
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The Atticus Corp. has a 7 percent coupon bond outstanding. The Finch Company has an 11 percent bond outstanding. Both bonds have 12 years to maturity, make semiannual payments, and have a YTM of 9 percent. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? What if interest rates suddenly fall by 2 percent instead? What does this problem tell us about the interest rate risk of lower coupon bonds
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