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The Faulk Corp. has a bond with a coupon rate of 5 percent outstanding. The Gonas Company has a bond with a coupon rate of 11 percent outstanding. Both bonds have 18 years to maturity, make semiannual payments, and have a YTM of 8 percent. a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What if rates suddenly fall by 2 percent instead? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

User Adel Mourad
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Answer:

5% is your right answer please answer

User Aleksei Yerokhin
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