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Both Company A and Company B have 9 percent coupons, makesemiannual payments, and are priced at par value. Company A has 3years to maturity, whereas Company B has 17 years to maturity.A) If interest rates suddenly rise by 2 percent, what is thepercentage change in the price of Company A?B) If interest rates suddenly rise by 2 percent, what is thepercentage change in the price of Company B?C) If rates were to suddenly fall by 2 percent instead, whatwould the percentage change in the price of Company A be then?D) If rates were to suddenly fall by 2 percent instead, whatwould the percentage change in the price of Company B be then?
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