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:

Inguinal Hernia

A condition where tissue, such as part of the intestine, protrudes through a weak spot in the abdominal muscles around the groin area.

Inguinal Canal

An anatomical passage in the anterior abdominal wall which in men conveys the spermatic cord and in women the round ligament of the uterus.

Paralytic Ileus

A condition of the intestines where there is an absence of muscle contractions, leading to blockage without an actual physical obstruction.

Cholecystectomy

Cholecystectomy is a surgical procedure to remove the gallbladder, often due to gallstones causing pain or infection.