Both bond A and bond B have 8.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while bond B has 18 years to maturity.
Assume if interest rates suddenly rise by 1.2 percent, what is the percentage change in the price of bond A and bond B?
Assume if interest rates suddenly fall by 1.2 percent instead, what would the percentage change in price of bond A and bond B?