What is the percentage change in the price of these bonds

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Both Bond Bill and Bond Ted have 10 percent coupons, make semi annual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity.

If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?

 

If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds?

Reference no: EM13872029

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