Both Bond Bill and Bond Ted have 10 percent coupons, make semi annual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity.
If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?
If rates were to suddenly fall by 3 percent instead, what would be the percentage change in the price of these bonds?