What will happen to the price of the bond

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Reference no: EM13870666

A $5000 bond with a coupon rate of 6.4% paid semi annually has four years to maturity and a yield to maturity of 6.2%. If interest rates fall and the yield to maturity decreases by 0.8%, what will happen to the price of the bond?

Options:

1) fall by $98.64

2) fall by $40.49

3) rise by $84.46

4) rise by $142.78

Reference no: EM13870666

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