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What would the percentage change in the price

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Question - Laurel, Inc., and Hardy Corp. both have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has three years to maturity, whereas the Hardy Corp. bond has 20 years to maturity.

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

If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then?

Reference no: EM133054291

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