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7. ( ) Assume that you invest 5-year bonds with face amount of $1,000 and coupon rate of 10% at $1,000. If market interest rates

7. ( ) Assume that you invest 5-year bonds with face amount of $1,000 and coupon rate of 10% at $1,000. If market interest rates decrease to 8% one year later, what is your rate of return?

(A) 8.3%. (B) -25.9%. (C) 16.62%. (D) -30.3%. (E) -15.9%.

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