The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 5.5 percent. Which one of the following statements is correct if the market yield suddenly increases to 6.5 percent?

1) The bond price will increase by $57.14.

2) The bond price will increase by 5.29 percent.

3) The bond price will decrease by $53.62.

4) The bond price will decrease by 5.43 percent.

5) The bond price will decrease by 5.06 percent.