One Year Before Maturity,the Price of a Bond with a Principal

question 234

Multiple Choice

One year before maturity,the price of a bond with a principal amount of $1,000 and a coupon rate of 5% paid annually rose to $1,019.The one-year interest rate must have

• A) risen to 6.0%.
• B) remained at 5%.
• C) fallen to 3%.
• D) fallen to 2%.
• E) fallen to 1%.