Please help. Please do NOT use EXCEL for formulas or to solve it in Excel. Please show each formula for each step. Do NOT skip simple steps. Please show in relevant order. Please keep the problem organized. Feel Free to use bold font for the formula.

Problem 7-20 Interest Rate Risk [LO2]

Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 8 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?

(Negative amounts 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.)

Percentage change in price of Bond J %

Percentage change in price of Bond K %

What if rates suddenly fall by 2 percent instead? (

Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Percentage change in price of Bond J %

Percentage change in price of Bond K %