The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a $1,000 par value.

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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? A. The bond price will increase by $57.14. B. The bond price will increase by 5.29 percent. C. The bond price will decrease by $53.62. D. The bond price will decrease by 5.43 percent. E. The bond price will decrease by 5.36 percent.
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Investment Analysis and Portfolio Management

ISBN: 978-0538482387

10th Edition

Authors: Frank K. Reilly, Keith C. Brown

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