A

$1,000

bond with a coupon rate of

6%

paid semiannually has

two

years to maturity and a yield to maturity of

8.3%.

If interest rates rise and the yield to maturity increases to

8.6%,

what will happen to the price of the bond?

A.

fall by $6.31

B.

fall by $5.26

C.

rise by $5.26

D.

The price of the bond will not change.