Exhibit 18.3 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Multiple Choice

Exhibit 18.3
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
A $1000 par value bond with 4 years to maturity and a 5% coupon has a yield to maturity of 6%. Interest is paid annually.
-Refer to Exhibit 18.3. Estimate the percentage price change for this 4-year $1,000 par value bond, with annual 5% coupon, if the yield falls from 6% to 5.5%.

A) -3.50%
B) -1.75%
C) 1.75%
D) 3.50%
E) None of the above