Both Bond A and Bond B have 7.2 percent coupons and are priced at par value. Bond A has 9 years to maturity, while
Both Bond A and Bond B have 7.2 percent coupons and are priced at par value. Bond A has 9 years to maturity, while
Bond B has 15 years to maturity. If interest rates suddenly rise by 2 percentage points, what is the difference in percentage changes in prices of Bond A and Bond B? (i.e., Bond A – Bond B). The bonds pay coupons twice a year.
(A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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