Question: Bond J is a 5 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds have 20 years to maturity and have

Bond J is a 5 percent bond. Bond K is a 9 percent bond. Both bonds have 20 years to and have a YTM of 7 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? What if rates suddenly fall by 2 percent instead? What does this problem tell you about the interest rate risk of lower bonds?

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