Exhibit 13.3 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM

A $1,000 par value bond with four years to maturity and a 5 percent coupon has a yield to maturity of 6 percent. Interest is paid annually.

Refer to Exhibit 13.3. Estimate the percentage price change for this four-year, $1,000 par value bond, with an annual 5 percent coupon, if the yield falls from 6 percent to 5.5 percent.

a. 3.50 percent

b. 0 percent

c. -3.50 percent

d. 1.75 percent

e. -1.75 percent