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Both Bond Sam and Bond Dave have 8 percent coupons, makesemiannual payments, and are priced at par value. Bond Sam has 4years to maturity, whereas Bond Dave has 18 years to maturity. (Donot round your intermediate calculations.) Requirement 1: (a) Ifinterest rates suddenly rise by 3 percent, what is the percentagechange in the price of Bond Sam? (b) If interest rates suddenlyrise by 3 percent, what is the percentage change in the price ofBond Dave? Requirement 2: (a) If rates were to suddenly fall by 3percent instead, what would the percentage change in the price ofBond Sam be then? (b) If rates were to suddenly fall by 3 percentinstead, what would the percentage change in the price of Bond Davebe then?
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