Question: TWO PART QUESTION: 36a. (Interest Rate risk) Bond S has 4 years to maturity. Bond T has 30 years to maturity. Both have 9% coupons

TWO PART QUESTION:

36a. (Interest Rate risk) Bond S has 4 years to maturity. Bond T has 30 years to maturity. Both have 9% coupons paid semi-annually, and are priced at par value. If the interest rate(yield to maturity) suddenly drops by 1%, the percentage change in the price of Bond T is Answer% (Keep two decimal numbers and the sign.)

36b.(Interest Rate risk) Bond S has 4 years to maturity. Bond T has 30 years to maturity. Both have 9% coupons paid semi-annually, and are priced at par value. If the interest rate(yield to maturity) suddenly rises by 4.5%, the percentage change in the price of Bond S is Answer% (Keep two decimal numbers and the sign.)

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