What Happens to the Price of a 3-Year Bond (With

question 2

Multiple Choice

What happens to the price of a 3-year bond (with par value $1,000) with an 8% coupon when interest rates change from 8 to 6%?

• A) A price increase of $51.54
• B) A price decrease of $51.54
• C) A price increase of $53.47
• D) A price decrease of $53.47

---

Definitions:

Critical Thinking Skills

The ability to actively and skillfully conceptualize, apply, analyze, synthesize, and evaluate information to reach a conclusion or judgement.

Academic Goals

Targets or objectives set for learning or educational achievement.

Family Events

Organized gatherings or activities designed for the participation and enjoyment of family members, aiming to strengthen family bonds and create memories.

Specific Academic Goals

Detailed objectives related to educational achievements that students aim to accomplish.