A 16-year,4.5 percent coupon bond pays interest annually.The bond has a face value of $1,000.What is the percentage change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent?
A) 2.14 percent decrease
B) 1.97 percent decrease
C) 0.21 percent increase
D) 1.97 percent increase
E) 2.14 percent increase
Correct Answer:
Verified
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