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The Faulk Corp. has a bond with a coupon rate of 4 percent outstanding. The Yoo...

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Finance

The Faulk Corp. has a bond with a coupon rate of 4 percentoutstanding. The Yoo Company has a bond with a coupon rate of 10percent outstanding. Both bonds have 13 years to maturity, makesemiannual payments, and have a YTM of 7 percent.

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

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Transcribed Image Text

The Faulk Corp. has a bond with a coupon rate of 4 percentoutstanding. The Yoo Company has a bond with a coupon rate of 10percent outstanding. Both bonds have 13 years to maturity, makesemiannual payments, and have a YTM of 7 percent.If interest rates suddenly rise by 2 percent, what is thepercentage change in the price of these bonds?

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