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A 5000 bond with a coupon rate of 54 paid semiannually has

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A $5000 bond with a coupon rate of 5.4% paid semiannually has five years to maturity and a yield to maturity of 7.5%. If interest rates falls and the yield to maturity decreases by 7.8% , what will happen to the price of the bond?

a) rise by $12.16

b) fall by $9.82

c) fall by $11.59

d) The price of the bond will not change

Reference no: EM13570117

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