you own two bonds. both bonds pay annual interest, have 6 percent annual coupons, $1,000 face values, and currently have 6 percent yields to maturity. bond a has 12 years to maturity and bond b has 4 years to maturity. if the market rate of interest rises unexpectedly to 7 percent, bond will be the most volatile with a price decrease of percent. hint: you need to calculate the price of each bond before and after the interest rate change, and then find the percentage change of the price of each bond. a. a; 5.73 b. a; 7.94 c. b; 3.39 d. b; 4.51
