A $13-$year$-$maturity zero$-$coupon bond selling at a yield to maturity of $9\%($effective annual yield$)$ has convexity of $174\mathrm{.}3$ and modified duration of $12\mathrm{.}06$ years. A $30-$year$-$maturity $7\%$ coupon bond making annual coupon payments also selling at a yield to maturity of $9\%$ has nearly identical duration$-12\mathrm{.}04$ years$-$but considerably higher convexity of $271\mathrm{.}1.$

Required:

a$.$ Suppose the yield to maturity on both bonds increases to $10\%.$ What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration$-$with$-$convexity rule?

b$.$ Suppose the yield to maturity on both bonds decreases to $8\%.$ What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration$-$with$-$convexity rule?

Complete this question by entering your answers in the tabs below.

Required B

Suppose the yield to maturity on both bonds increases to $10\%.$ What will be the actual percentage capital loss on each bond? What percentage capital loss would be predicted by the duration$-$with$-$convexity rule?

Note: Input all amounts as positive values. Do not round intermediate calculations. Round your answers to $2$ decimal places.

$\backslash$table$[[,$Zero Coupon Bond,Coupon Bond$],[$Actual$,$g$,\%,\%$