Bond J is a 3% coupon bond. Bond K is a 9% coupon bond. Both bonds have

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Bond J is a 3% coupon bond. Bond K is a 9% coupon bond. Both bonds have 15 years to maturity, make semiannual payments and have a YTM of 6%. If interest rates suddenly rise by 2%, what is the percentage price change of these bonds? What if rates suddenly fall by 2% instead? What does this problem tell you about the interest rate risk of lower coupon bonds?

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Fundamentals Of Corporate Finance

ISBN: 9781259654756

10th Canadian Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway

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