Question: Bond value and changing required returns Bond ( X ) has a coupon rate of ( 1 5 % )

Bond value and changing required returns Bond \( X \) has a coupon rate of \(15\%\), and Bond \( Y \) pays a \(7\%\) annual coupon. Assume that both bonds have a \(\$ 1,000\)-par-value. Both bonds have 22 years to maturity. The yield to maturity for both bonds is now \(15\%\). a. If the interest rate rises by \(2\%\), by what percentage will the price of the two bonds change? b. If the interest rate drops by \(2\%\), by what percentage will the price of the two bonds change? c. Which bond has more interest rate risk? Why?
Bond value and changing required returns Bond \ (

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