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Use the bond term's below to answer the question Maturity 6 years Coupon Rate 3% Face value $1,000 Annual Coupons When you buy the bond

Use the bond term's below to answer the question

Maturity 6 years

Coupon Rate 3%

Face value $1,000

Annual Coupons

When you buy the bond the interest rate is 5%

Right after you buy the bond, the interest rate changes from 5.00% to 4.00% and remains there.

What is the price effect in year 3?

$24.29

$22.08

$29.39

$27.93

$26.71

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