After recently receiving a bonus, you have decided to add some bonds to your investment portfolio. You have narrowed your choice down to the following bonds (assume semiannual payments): Which bond...

After recently receiving a bonus, you have decided to add some bonds to your investment portfolio. You have narrowed your choice down to the following bonds (assume semiannual payments):

Which bond would you rather own if you expect market rates to fall by 2% across the maturity spectrum? What if rates will rise by 2%? Why?

Extracted text: Bond A Вond B Settlement Date Maturity Date Coupon Rate Price Face Value 2/15/2012 6/15/2027 8.00% 890.00 $ 1,040.00 2/15/2012 4/15/2016 3.50% $ 1,000.00 $ 1,000.00