A $5000 Bond with a Coupon Rate of 5

question 107

Multiple Choice

A $5000 bond with a coupon rate of 5.7% paid semiannually has ten years to maturity and a yield to maturity of 6.4%. If interest rates fall and the yield to maturity decreases by 0.8%, what will happen to the price of the bond?

• A) The price of the bond will fall by $293.50.
• B) The price of the bond will fall by $352.20.
• C) The price of the bond will rise by $410.90.
• D) The price of the bond will rise by $293.50.

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Definitions:

Interpersonal Communication

The process of exchanging information, thoughts, and feelings between individuals through verbal or non-verbal means, fundamental to building and maintaining relationships.

Feedback

Information provided about the results of an action or process, often used as a basis for improvement or adjustment.

Interpersonal Communication

The communication of thoughts, emotions, and ideas among two or more individuals via spoken or unspoken means.

Accuracy

The degree to which a measurement, calculation, or action reflects the true value or intended result.