Azusa Pizza company has a 7-year, 9% annual coupon bond with a $1,000 par value. Glendora Pizza has a 14-year, 9% annual coupon bond with a $1,000 par value. Both bonds currently have a yield to maturity of 7%. If the market interest rate increases to 7.5%, what will happen to the bond prices?

Choices:

The Glendora bond will decrease in value by $13.73

The Azusa bond will decrease in value by 3.30%.

Both bonds would decrease in value by 4.61%.

The Azusa bond will increase in value by $50.68

The Glendora bond will decrease in value by 4.05%.