Coupon rate has left till maturity

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Reference no: EM13802515

Suppose in 2012 you buy 3% coupon rate, $100 face value bond for $100 that has 2 years left till maturity. If in 2013 interest rates decrease to 1%, what will be the price of your bond and what will be your rate of return if you decide to sell it?

A) $98 and 1%

B) $100 and 3%

C) $102 and 5%

D) $103 and 6%

Reference no: EM13802515

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