A 12-Year, 5% Coupon Bond Pays Interest Annually

Multiple Choice

A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield rises to 6% from the current yield of 4.5%?

A) 11.11% decrease
B) 12.38% decrease
C) 12.38% increase
D) 14.13% decrease
E) 14.13% increase