Bond J has a coupon rate of 5 percent. Bond K has a coupon
rate of 11 percent. Both bonds have 8 years to maturity, make
semiannual payments, and have a YTM of 6 percent.
If interest rates suddenly rise by 2 percent, what is the
percentage price change of Bond J?
A. -10.95%
B. -9.95%
C. -11.95%
D. -11.93%
If interest rates suddenly rise by 2 percent, what is the
percentage price change of Bond K?
A. -10.58%
B. 32.21%
C. -8.60%
D. -10.60%
If interest rates suddenly fall by 2 percent, what is the
percentage price change of Bond J?
A. 13.95%
B. -17.48%
C. 13.93%
D. -11.97%
If interest rates suddenly fall by 2 percent, what is the
percentage price change of Bond K?
A. -10.62%
B. 18.48%
C. 12.15%
D. 12.27%