Question
A 6% annual coupon bond with a $1,000 par value has a yield to maturity of 7.5%. This bond has a duration of 7.45 years.
A 6% annual coupon bond with a $1,000 par value has a yield to maturity of 7.5%. This bond has a duration of 7.45 years. If the market interest rate goes up by 20 basis points,
what impact will it have on the price of this bond?
Select one:
The bond price will increase by 2.04%
The bond price will decrease by 1.39%
The bond price will increase by 1.39%
The bond price will remain unchanged
The bond price will decrease by 2.04%
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
13th edition
978-1285027371, 128502737X, 978-1133541141
