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