An 8% coupon bond with 15 years to maturity is priced to offer a 9% yield to maturity. You believe that in one year, the yield to maturity will be 6.5%. What is the change in price the bond will experience in dollars? (Assume annual interest payments and par value is $1,000.)

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The bond's price will increase when the yield to maturity decreases. Calculating the bond price with a 9% yield and then with a 6.5% yield, the difference is approximately $215.82.

An 8% Coupon Bond with 15 Years to Maturity Is