Question: Suppose that a $100 face value 10 year bond that has an annual 7% coupon and the market rate of interest is 6.5%. How much

Suppose that a $100 face value 10 year bond that has an annual 7% coupon and the market rate of interest is 6.5%. How much will the price of this bond change in percentage terms if the interest rate falls to 6.0%?

Increase by 3.64%
Increase by 5.00%
Increase by 3.54%
Decrease by 5.00%

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