The Corner Grocer has a 7 year, 6 percent annual coupon bond outstanding with a $1,000 par value The bond has a yield to maturity of 5 5 percent Which one of the following statements is correct if the market yield suddenly increases to 6 5 percent A The bond price will increase by $57 14 B The bond...

Difference in prices 97258 102841 5583 Percentage dif ...

The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a $1,000 par value.

Question:

The Corner Grocer has a 7-year, 6 percent annual bond outstanding with a $1,000 par value. The bond has a yield to of 5.5 percent. Which one of the following statements is correct if the market yield suddenly increases to 6.5 percent? A. The bond price will increase by $57.14.B. The bond price will increase by 5.29 percent.C. The bond price will decrease by $53.62.D. The bond price will decrease by 5.43 percent.E. The bond price will decrease by 5.36 percent.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...