What would be the percentage change in price of these bonds

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Reference no: EM13877674

Both Bond Bill and Bond Ted have 10.8 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 7 years to maturity, whereas Bond Ted has 24 years to maturity.

Requirement 1:

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

Requirement 2:

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

Reference no: EM13877674

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