WHAT HAPPENS TO THE PRICE OF A THREE-YEAR BOND WITH AN 8 PERCENT C...
13. What happens to the price of a three-year bond with an 8 percent coupon
rate, semi-annual coupons, when interest rates change from 7 percent to 6
percent? The bond has a par value of $1,000.
A) A price decrease of $27.03
B) A price decrease of $27.53
C) A price increase of $27.03
D) A price increase of $27.53