Problem $6-20$ Interest Rate Risk $[$LO $2]$

Bond $J$ has a coupon rate of $4\mathrm{.}8$ percent. Bond K has a coupon rate of $14\mathrm{.}8$ percent. Both bonds have eleven years to maturity, a par

value of $$1,000,$ and a YTM of $10\mathrm{.}6$ percent, and both make semiannual payments. Remember, price change equals $($ending price $-$

beginning price$)/$ beginning price or ending price$/$beginning price $-1.$

a$.$ If interest rates suddenly rise by $2$ percent, what is the percentage change in the price of these bonds?

Note: 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$.,32\mathrm{.}16.$

b$.$ If interest rates suddenly fall by $2$ percent instead, what is the percentage change in the price of these bonds?

Note: Do not round intermediate calculations and enter your answers as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$