Paomi Inc. invested in a 5-year annual coupon bond two years ago. The face value of the bond is $1000 and the annual coupon rate is 6%. The interest rate (or the required rate of return) of the bond was 7% two years ago when Paomi purchased the bond. If the interest rate (or the required rate of return) of the bond goes down to 6.5% now, which of following is FALSE?

Group of answer choices

A) This example shows the effect of interest rate risk on Paomis assets.

B) The bond price now is $986.76.

C) The reinvestment return of the coupon is 6%.

D) A decrease in interest rate affects both bond price and reinvestment return of coupon.