A 1000 bond with a coupon rate of 54 paid semiannually

Reference no: EM13478058

A $1000 bond with a coupon rate of 5.4% paid semiannually has five years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8%, what will happen to the price of the bond?

a) fall by $9.82

b) fall by $11.59

c) rise by $12.16

d) The price of the bond will not change.

Reference no: EM13478058

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