Question: Please provide full calculation and working. Do not solve in Excel. Laurel Inc. and Hardy Corp. both have 7 percent coupon bonds outstanding, with semi-annual

Please provide full calculation and working. Do not solve in Excel. Laurel Inc. and Hardy Corp. both have 7 percent coupon bonds outstanding, with semi-annual interest payments, and both are priced at par value. The Laurel Inc. bond has 2 years to maturity, whereas the Hardy Corp. bond has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then? What does this problem tell you about the interest rate risk of longer-term bonds?

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