Suppose That a Bond Promises to Pay Its Holder $100

Suppose that a bond promises to pay its holder $100 a year forever. If the price of the bond increases from $1,000 to $1,250, then the interest rate on the bond

A) does not change because it is not affected by the price of the bond.
B) rises from 8 per cent to 10 per cent.
C) falls from 10 per cent to 8 per cent.
D) falls from 10 per cent to 6 per cent.