You recently invested in a bond that is paying a $70 coupon and will continue to do so until the bond matures. At maturity in 6 years, the bond will be repaid at $1,000. But interest rates just went from 8% (when the bond was purchased) to currently 7%. What will happen to the value of your bond?

a. There is not enough information to determine this because the only change is the interest rate.

b. Nothing happens to the value of the bond as it has already been purchased.

c. The value of the bond decreases.

d. The value of the bond increases

Answer rating: 100% (QA)

The detailed answer for the above question is provided below c The value of the bond d... View the full answer