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Both Bond Bill and Bond Ted have 11.6 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 6 years to maturity,...
Both Bond Bill and Bond Ted have 11.6 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 6 years to maturity, whereas Bond Ted has 23 years to maturity. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds? Percentage change in price% %Requirement 2: If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds? Percentage change in price % %