Question: Bond value and changing required returns Bond X has a coupon rate of 14%, and Bond Y pays a 6% annual coupon. Assume that both

Bond value and changing required returns Bond X has a coupon

Bond value and changing required returns Bond X has a coupon rate of 14%, and Bond Y pays a 6% annual coupon. Assume that both bonds have a $1,000-par-value. Both bonds have 13 years to maturity. The yield to maturity for both bonds is now 14%. 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

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