Question Bond A And Bond B Have 6 Percent Coupons Make Semiannual Payments And Are Priced At Face (Par) Value $1 000

Bond A and bond B have 6 percent coupons, make semiannual payments, and are priced at face (par) value, $1,000.

Question

Bond A and bond B have 6 percent coupons, make semiannual payments, and are priced at face (par) value, $1,000.

Bond A has 5 years to maturity whereas bond B has 20 years to maturity. If interest rates suddenly rise by 1 percent, what is the percentage change in the price of the bonds?

Finance