USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 53

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Talmart Corporation bonds have a $1,000 face value and will mature in four years. The bonds have a 7 percent coupon rate. Interest is paid annually, and the required rate of return is 6 percent for these bonds.
-Refer to Exhibit 13.2. If interest rates increase 50 basis points, what will be the approximate price change for the Talmart bond?

• A) -17.0 percent
• B) -1.7 percent
• C) 1.7 percent
• D) 1.8 percent
• E) 17.0 percent