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A $3000 Bond with a Coupon Rate of 7

Question 54

Multiple Choice

A $3000 bond with a coupon rate of 7.2% paid semi-annually has six years to maturity and a yield to maturity of 4.6%.If interest rates fall and the yield to maturity decreases by 0.4%,what will happen to the price of the bond?


A) rise by $24.13
B) rise by $54.77
C) fall by $68.04
D) fall by $67.71
E) fall by $48.65

Correct Answer:

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