The Beta Co.bonds have a maturity of 13 years,a face value of $1,000,a coupon rate of 6.5 percent,and pay interest annually.What is the percentage change in the price of these bonds if the market yield rises to 6.9 percent from its current level of 6.5 percent?

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At 6.5%,the bond sells at par.At 6.9%,the bond sells at a discount. Bond value = (0.065 × $1,000)× {[1 - 1 / (1 + 0.069)¹³] / 0.069} + [$1,000 / (1 + 0.069)¹³] = $966.38 11ea5bb7_de33_05ed_8724_c7b67fc244fa_TB1005_00 Percentage change in price = ($966.38 - $1,000)/ $1,000 = -0.0336 or - 3.36%