Multiple Choice
A bond is scheduled to mature in five years.Its coupon rate is 9 percent with interest paid annually.This $1,000 par value bond carries a yield to maturity of 10 percent.Calculate the percentage change in this bond's price if interest rates on comparable risk securities increase to 11 percent.Use the duration valuation equation.
A) +4.25 percent
B) -4.25 percent
C) +8.58 percent
D) -3.93 percent
E) -3.84 percent
Correct Answer:
Verified
Correct Answer:
Verified
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