The Following Information Relates to Problems

Multiple Choice

The following information relates to Problems
an investor purchases a nine-year, 7% annual coupon payment bond at a price equal to par value. after the bond is purchased and before the first coupon is received, interest rates increase to 8%. The investor sells the bond after five years. assume that interest rates remain unchanged at 8% over the five-year holding period.
-The capital gain/loss per 100 of par value resulting from the sale of the bond at the end of the five-year holding period is closest to a:

A) loss of 8.45.
B) loss of 3.31.
C) gain of 2.75.