Consider a bond that pays annually an 8% coupon with 20 years to maturity.The amount that the price of the bond will change if its yield to maturity increases from 5% to 7% is closest to:
A)-$270.
B)-$225.
C)-$310.
D)-$250.

Question

Quizplus · Accepted Answer

The bond's price decreases when the yield to maturity increases. Calculating the bond price at 5% and 7% YTM and finding the difference gives a change closest to -$270.

Consider a Bond That Pays Annually an 8% Coupon with 20