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Shady Rack Inc. has a bond outstanding with 9.75 percent coupon, paid semiannually, and 17 years to maturity. The market price of the bond is
Shady Rack Inc. has a bond outstanding with 9.75 percent coupon, paid semiannually, and 17 years to maturity. The market price of the bond is $1,042.43. Calculate the bonds yield to maturity (YTM). Now, if due to changes in market conditions, the market required YTM suddenly increases by 2% from your calculated YTM, what will be the percent change in the market price of the bond?
| A. | -17.76% | |
| B. | -14.87% | |
| C. | -15.66% | |
| D. | -16.39% | |
| E. | -17.09% | |
| F. | -14.01% |
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