What is the percentage price change of these bonds

Reference no: EM13292271

Bond J is a 4% coupon bond. Bond K is a 12% coupon bond. Both bonds have 8 years to maturity, make semiannual payments and have a YTM of 7%. If interest rates suddenly rise by 2%, what is the percentage price change of these bonds? what if rates suddenly fall by 2% instead? what does this problem tell you aout the interest rate risk of lower coupon bonds?

Reference no: EM13292271

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