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Both bond a and bond b have 9 percent coupons and are

Both bond A and bond B have 9 percent coupons and are priced at par value. Bond A has 5 years to maturity, while bond B has 20 years to maturity.

a. If interest rates suddenly rise by 1.6 percent, what is the percentage change in price of bond A and bond B?

b. If interest rates suddenly fall by 1.6 percent instead, what would be the percentage change in price of bond A and bond B?

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Financial Management: Both bond a and bond b have 9 percent coupons and are

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