You Own a 7 Percent, Semiannual Coupon Bond That Matures

question 13

Multiple Choice

You own a 7 percent, semiannual coupon bond that matures in 8 years. The par value is $1,000 and the current yield to maturity is 7.6 percent. What will the percentage change in the price of your bond be if the yield to maturity suddenly increases by 75 basis points?

• A) -4.37 percent
• B) -4.49 percent
• C) -4.54 percent
• D) -4.61 percent
• E) -4.77 percent

---

Definitions:

Cohort

A group of individuals sharing a common characteristic or experience within a defined period, often used in statistical analyses and research studies.

Context

The circumstances or background that surrounds and gives meaning to an event, statement, or idea.

Conventional Moral Reasoning

Kohlberg’s second level of moral reasoning, emphasizing social rules.

Moral Reasoning System

The mechanism through which individuals make decisions about what is right and wrong based on societal norms, personal values, and ethical principles.