A

$1,000

bond with a coupon rate of

5.8%

paid semiannually has

five

years to maturity and a yield to maturity of

7.1%.

If interest rates rise and the yield to maturity increases to

7.4%,

what will happen to the price of the bond?

Question content area bottom

Part 1

A.

fall by $14.33

B.

fall by $11.95

C.

rise by $11.95

D.

The price of the bond will not change.