With the uncertain outlook for inflation, you recognize that yields to

maturity might fall or rise rapidly and unexpectedly. You want to estimate

now how bond prices might change in the face of a changing YTM. To do

this, you know that you need both a bonds current price and its modified

duration to complete the estimate. In particular, you are looking at a $1,000

face (par) value bond by Drop-Me-Here, Inc. The bond has 6 years until

maturity, a coupon of 5.25% paid semiannually, and a current 7.3% YTM.

What is the current price of the bond?

Choose the right answer:

$1,045.78

$965.86

$959.41

$1,015.77

$901.82