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Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments,...

Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are currently priced at the par value of $1,000. The Laurel, Inc., bond has four years to maturity, whereas the Hardy Corp. bond has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of each bond?

Percentage change in price of Laurel, Inc., bond % Percentage change in price of Hardy Corp. bond % If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage change in price of Laurel, Inc., bond % Percentage change in price of Hardy Corp. bond %

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C86 (B86-B82)/B82 80 81 Current price: 82 Bond Laurel inc. 83 Bond Hardy cor 84 85 If interest rate rise by 2% 86 Bond Laurel inc. 87 Bond Hardy cor Change in bond prices $ 1,000.00 $ 1,000.00 $ 936.65 $ 854.66 -6.33%) -14.53% -PV(11%/2,4*2,90/2,1000)-1 -PV(1196/2,15*2,90/2,1000)-1 89 If interest rate fall by 2% 90 Bond Laurel inc. 91 Bond Hardy corp $ 1,068.74 $ 1,183.92 6.87% -PV(796/2,4*2,90/2,1000)-1 -PV(7%)2,15*2,90/2,1000)*-1 18.39%

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