What if rates suddenly fall by two percent instead

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Bond J has a coupon rate of 4 percent and Bond K has a coupon rate of 10 percent. Both bonds have 13 years to maturity, make semiannual payments, and have a YTM of 7 percent.

If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?

What if rates suddenly fall by 2 percent instead?

Reference no: EM131054660

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