Question: Help Save & Exit Sub Problem 7-19 Interest Rate Risk [LO2] Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and
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Help Save & Exit Sub Problem 7-19 Interest Rate Risk [LO2] Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has three years to maturity, whereas Bond Dave has 20 years to maturity. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If rates were to suddenly fall by 2 percent instead, what would be the p@rcentage change in the price of Bond Sam and Bond Dave? (Do not round intermediate caiculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Bond Sam Bond Dave
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