Question: question : a, b, c Bond value and changing required returns Bond X has a coupon rate of 12%, and Bond Y pays a 5%

question : a, b, c

Bond value and changing required returns Bond X has a coupon rate of 12%, and Bond Y pays a 5% annual coupon. Assume that both bonds have a $1,000-par-value. Both bonds have 15 years to maturity. The yield to maturity for both bonds is now 12%. a. If the interest rate rises by 2%, by what percentage will the price of the two bonds change? b. If the interest rate drops by 2%, by what percentage will the price of the two bonds change? c. Which bond has more interest rate risk? Why? a. If the interest rate rises by 2%, the price of bond X will change by \%. (Round the percentage to two decimal places.)

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