If a $1,000 bond has a coupon of 8 percent and matures after eight years,the price of the bond will exceed $1,000 if interest rates are 9 percent.

Name: If a $1,000 bond has a coupon of 8 percent and matures after eight years,the price of the bond will exceed $1,000 if interest rates are 9 percent.
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When interest rates increase, the price of existing bonds decreases. Therefore, if interest rates are 9 percent, the price of a bond with a coupon of 8 percent will be less than $1,000, not more.

If a $1,000 Bond Has a Coupon of 8 Percent