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    Nov 30, 2010, 03:55 PM
    interest rate risk
    bond sam and bond dave have 8% coupon, they make semi annual payments and are priced at par value. Bond sam has 2 year to maturity. Bond dave has 15 year to maturity. If interest rate rise suddenly by 2% what is the percentage change in the price of bond sam? Of bond dave? If rate suddenly fall by 2%, what is the percentage change in the price of bond sam? Of bond dave?

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