A $5000 bond with a coupon rate of 4.2% paid quarterly has eight years to maturity and a yield to maturity of 6.3%. If interest rates rise and the yield to maturity increases to 6.6%, how much will the price of the bond change?
A. |
The price will increase by $83.44. |
|
B. |
The price will decrease by $84.71. |
|
C. |
The price will decrease by $83.44. |
|
D. |
The price will decrease by $85.36. |
Answer D
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