Question

A bond has a coupon rate of 8 percent, 7 years to maturity, semiannual interest payments, and a YTM of 7 percent. If interest rates suddenly rise by 1.5 percent, what will be the percentage change in the bond price?

A) −8.16 percent

B) −8.87 percent

C) −7.56 percent

D) −7.64 percent

E) −8.67 percent

Answer

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