Corporate bond A has a 6 percent coupon and matures in 3 years. Corporate bond B has a 6 percent coupon and matures in 15 years. The current interest rate is 6 percent. By how much will Bond A and Bond B change in price if the market rate increases to 6.5 percent?

Answer rating: 100% (QA)

To calculate the change in price for bond A and bond B if the market rate increases to 65 percent we need to compare the coupon rate of the bonds to the new market rate Given Bond A has a 6 percent co... View the full answer