A $1,000 Bond Has a Market Price of $850

question 54

Multiple Choice

A $1,000 bond has a market price of $850. During year one its discount decreased by $10. If the yield-to-maturity remains fixed, during year five its discount will likely decrease by

• A) $7.
• B) $2.
• C) must know size of coupon rate.
• D) $15.

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