Estimate the Percentage Price Change for a Five-Year, $1,000 Par

question 125

Multiple Choice

Estimate the percentage price change for a five-year, $1,000 par value bond, with a 6 percent coupon, if the yield rises from 8 percent to 8.5 percent. Interest is paid semiannually.

• A) 2.1 percent
• B) -2.1 percent
• C) 4.4 percent
• D) -4.4 percent
• E) 0 percent