Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 14 years to maturity.

	If interest rates suddenly rise by 3 percent, what is the percentage change in the price of Bond Sam?
	multiple choice 1 -7.61% -7.59% 7.75% -8.24%

	If interest rates suddenly rise by 3 percent, what is the percentage change in the price of Bond Dave?
	multiple choice 2 -28.78% -22.35% -22.33% 24.20%

	If rates were to suddenly fall by 3 percent instead, what would the percentage change in the price of Bond Sam be then?
	multiple choice 3 7.75% 8.38% 8.40% -7.56%

	If rates were to suddenly fall by 3 percent instead, what would the percentage change in the price of Bond Dave be then?
	multiple choice 4 -22.30% 31.90% 31.92% 24.20%

Answer rating: 100% (QA)

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