Question: PROBLEM SOLVING -60 Points 1. (15 Points) Bond J is a 3 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds

PROBLEM SOLVING -60 Points 1. (15 Points) Bond J is a 3 percent coupon bond. Bond K is a 9 percent coupon bond. Both bonds have 15 years to matunty, make semiannual payments, and have a yield-to-maturity (YTM) of 6 percent. a) ( 12 points) If interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds? b) (3 points) What does this problem tell you about the interest rate risk of lower-coupon bonds

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