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Bond J has a coupon of 7.2 percent. Bond K has a coupon of 11.2 percent....

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Finance

Bond J has a coupon of 7.2 percent. Bond K has a coupon of 11.2percent. Both bonds have 12 years to maturity and have a YTM of 8.4percent.

a. If interest rates suddenly rise by 1.8percent, what is the percentage price change of these bonds?(A negative value should be indicated by a minus sign. Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)


%? in Price

Bond J: %

Bond K:(11.54)%

Answer & Explanation Solved by verified expert
4.3 Ratings (805 Votes)
Bond J K N Bond Price Annual Coupon1 YTMk Par value1 YTMN k1 K 12 Bond Price 7210001001 84100k 10001 8410012 k1 Bond Price 91141 Bond K K N Bond    See Answer
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Transcribed Image Text

Bond J has a coupon of 7.2 percent. Bond K has a coupon of 11.2percent. Both bonds have 12 years to maturity and have a YTM of 8.4percent.a. If interest rates suddenly rise by 1.8percent, what is the percentage price change of these bonds?(A negative value should be indicated by a minus sign. Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)%? in PriceBond J: %Bond K:(11.54)%

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