Suppose a bond’s price is expected to increase by 5% if its market discount rate decreases by 100 bps. If the bond’s market discount rate increases by 100 bps, the bond price is most likely to change by:

A . 5%.

B . less than 5%.

C . more than 5%.

Th e following information relates to Questions 11 and 12 Bond Coupon Rate Maturity (years)
A 6% 10 B 6% 5 C 8% 5 All three bonds are currently trading at par value.