Question: A $ 5 , 0 0 0 bond with a coupon rate of 5 . 8 % paid semiannually has two years to maturity and

A $5,000 bond with a coupon rate of 5.8% paid semiannually has two years to maturity and a yield to maturity of 8.6%. If interest rates rise and the yield to maturity increases to 8.9%, what will happen to the price of the bond?
A. The price of the bond will fall by $31.26.
B. The price of the bond will fall by $26.05.
C. The price of the bond will rise by $26.05.
D. The price of the bond will not change.
A $ 5 , 0 0 0 bond with a coupon rate of 5 . 8 %

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