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Jordan Bought a 4% Semi-Annual Coupon Bond with 25 Years

Question 46

Multiple Choice

Jordan bought a 4% semi-annual coupon bond with 25 years to maturity at par value of $1,000. If the required rate of return (yield to maturity) of this bond increases to 4.25%, by how much does the value of the bond change?


A) the price falls by $37.04
B) the price increases by $39.28
C) the price falls by $38.27
D) The value does not change if Jordan intends to hold the bond to maturity.

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