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Answer the question based on the following information for a bond having no expiration date. Bond price = $1,000 bond fixed annual interest rate payment
Answer the question based on the following information for a bond having no expiration date. Bond price = $1,000 bond fixed annual interest rate payment = $100 bond annual interest rate = 10 percent. If the price of its bond increases to $5,000 the interest rate will
A. rise to 50 percent
B. fall to 5 percent
C. fall to 2 percent
D. rise to 12 percent
E. fall to 4 percent
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