Question: Bond value and changing required returnsBond X has a coupon rate of 1 4 % , and Bond Y pays a 5 % annual coupon.

Bond value and changing required returnsBond X has a coupon rate of 14%, and Bond Y pays a 5% annual coupon. Assume that both bonds have a $ 1 comma 000-par-value. Both bonds have 10 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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