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A $5000 bond with 4 years to maturity has a coupon rate of 6.4% paid semi-annually and a yield to maturity of 6.2% (APR with
A $5000 bond with 4 years to maturity has a coupon rate of 6.4% paid semi-annually and a yield to maturity of 6.2% (APR with semi-annual compounding). If interest rates fall and the yield to maturity is now 5.4%, what will happen to the price of the bond?
A) fall by $98.64
B) fall by $40.49
C) rise by $84.46
D) rise by $142.78
E) The price of the bond will not change.
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