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April 19, 2014

Homework Help: Finance

Posted by Tom on Friday, July 23, 2010 at 11:30pm.

Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, wheareas Bond Dave has 20 years to maturity. If interest rates suddenly rise by 2 percent, the percentage change in the price of Bonds Sam and Dave is ? percent and ? percent, respectively. (Do not include the percent signs (%). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) If rates were to suddenly fall by 2 percent instead, the percentage change in the price of Bonds Sam and Dave is ? percent and ?percent, respectively.

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