Question: The following is data for two bonds at a time when the market yield is 7 percent. These bonds are otherwise identical (FV = $1,000,

The following is data for two bonds at a time when the market yield is 7 percent.

These bonds are otherwise identical (FV = $1,000, five years to maturity, semi-annual coupon payments). Which bond€™s price will change more, and by how much, if the market yields increases by 100 basispoints?

Coupon Rate 6% 8% Price $958.42 $1,041.58 Bond

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