Question: Answer the question based on the following information for a bond having no expiration date. Bond price = $1,000 bond fixed annual interest rate payment

Answer the question based on the following information for a bond having no expiration date. Bond price = $1,000 bond fixed annual interest rate payment = $100 bond annual interest rate = 10 percent. If the price of its bond increases to $5,000 the interest rate will

A. rise to 50 percent

B. fall to 5 percent

C. fall to 2 percent

D. rise to 12 percent

E. fall to 4 percent

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