Question: Use the bond term's below to answer the question Maturity 6 years Coupon Rate 3% Face value $1,000 Annual Coupons When you buy the bond

Use the bond term's below to answer the question

Maturity 6 years

Coupon Rate 3%

Face value $1,000

Annual Coupons

When you buy the bond the interest rate is 6%

Right after you buy the bond, the interest rate changes from 6.00% to 5.00% and remains there.

What is the price effect in year 3?

Group of answer choices

A. $21.26

B. $28.30

C. $25.73

D. $26.89

E. $23.39

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