By how much will a bond increase in price over the next year if it currently sells for $925, has five years until maturity, and an annual coupon rate of 7%?
A)$8.26
B)$8.92
C)$12.55
D)$15.00 Using the BAII Plus calculator:

Question

Quizplus · Accepted Answer

To find the increase in bond price, calculate the bond's price one year from now using the BAII Plus calculator. Input N=4 (years remaining), I/Y=market interest rate, PMT=70 (annual coupon), FV=1000 (face value), and PV=-925 (current price). Solve for the new PV, and the difference gives the increase.

By How Much Will a Bond Increase in Price Over