What is the percentage change in the price of bond

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Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 12 years to maturity

a) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam?

b) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave?

a) If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then?

b) If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then?

Reference no: EM131531145

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