Consider a Bond That Pays Annually an 8% Coupon with 20

question 113

Multiple Choice

Consider a bond that pays annually an 8% coupon with 20 years to maturity.The percentage change in the price of the bond if its yield to maturity increases from 5% to 7% is closest to:

• A)22.5%.
• B)24.5%.
• C)-22.5%.
• D)-19.5%.