Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, whereas Bond Dave has 16 years to maturity.       If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam?         multiple choice 1 -7.52% -7.54% 7.68% -8.15%        If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave?         multiple choice 2 -14.90% -17.51% 16.01% -14.88%        If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then?         multiple choice 3 -7.49% 8.32% 8.30% 7.68%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, whereas Bond Dave has 16 years to maturity.

   

  If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam?
     
  multiple choice 1
  • -7.52%

  • -7.54%

  • 7.68%

  • -8.15%

    

  If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Dave?
     
  multiple choice 2
  • -14.90%

  • -17.51%

  • 16.01%

  • -14.88%

    

 

If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Sam be then?

     
  multiple choice 3
  • -7.49%

  • 8.32%

  • 8.30%

  • 7.68%

    

 

If rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of Bond Dave be then?

     
  multiple choice 4
  • 16.01%

  • 19.05%

  • -14.85%

  • 19.07%

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