Consider a 3-Year Bond with a Par Value of $1,000

question 57

Multiple Choice

Consider a 3-year bond with a par value of $1,000 and an 8% annual coupon.If interest rates change from 8 to 6% the bond's price will:

• A) increase by $51.54.
• B) decrease by $51.54.
• C) increase by $53.46.
• D) decrease by $53.46.

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Definitions:

Hourglass Sequence

A narrative or structural format that starts and ends broadly, with a tighter focus or narrower scope in the middle.

Closing Phase

The final stage in a process or activity, where completion is prepared and assessed.

Follow Up Questions

Questions asked after an initial question or discussion, aimed at obtaining more detailed information or clarifying previous answers.

Suspense

A state of mental uncertainty or excitement, as in awaiting a decision or outcome, often used to engage audiences in literature or film.