18. Salim, a risk taker investor, purchased a $1000 bond with a coupon rate of 6% paid semiannually. The bond has 7 years to maturity and a yield to maturity of 9.5%. Assume that the interest rates...


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18. Salim, a risk taker investor, purchased a $1000 bond with a coupon rate of 6%<br>paid semiannually. The bond has 7 years to maturity and a yield to maturity of<br>9.5%. Assume that the interest rates rise and the yield to maturity decreases by<br>100 basis points, what will happen to the price of the bond? *<br>A The price of the bond will fall by $46.14.<br>B) The price of the bond will rise by $46.14.<br>C) The price of the bond will rise by $45.2.<br>O D) The price of the bond will fall by $45.2.<br>O E) None of the above<br>

Extracted text: 18. Salim, a risk taker investor, purchased a $1000 bond with a coupon rate of 6% paid semiannually. The bond has 7 years to maturity and a yield to maturity of 9.5%. Assume that the interest rates rise and the yield to maturity decreases by 100 basis points, what will happen to the price of the bond? * A The price of the bond will fall by $46.14. B) The price of the bond will rise by $46.14. C) The price of the bond will rise by $45.2. O D) The price of the bond will fall by $45.2. O E) None of the above

Jun 08, 2022
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