If the interest rate suddenly falls by 2rise by 2 what is


Bond-A and Bond-B has same coupon rate of 8% , make semi-annual coupon payment and are priced at par. Bond-A has 3 years to maturity and Bond-B has 20 years to maturity. If the interest rate suddenly falls by 2%/rise by 2% , what is the percentage change in thee bond price. What does it tell about the interest rate risk of longer term bonds.

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Finance Basics: If the interest rate suddenly falls by 2rise by 2 what is
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