Kamins Corporation has two bond issues outstanding each with a
Kamins Corporation has two bond issues outstanding, each with a par value of $1,000. Information about each is listed below. Suppose market interest rates rise 1 percentage point across the yield curve. What will be the change in price for each of the bonds? Does this tell us anything about the relationship between time to maturity and interest rate risk?
Bond A: 5 years to maturity, 8% coupon, market interest rate is 9%
Bond B: 12 years to maturity, 8% coupon, market interest rate is 9%
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