If Bond C is a 5% coupon, 10 year bond with a $1,000 face value and a 8% yield.  If interest rate goes to 10%, Bond C will experience a capital loss.  If interest rate goes down to 6%, Bond C’s capital gain: Group of answer choices   A. is equaled to the capital loss in absolute terms B. is less than the capital loss in absolute terms. C. cannot be calculated. D. is more than the capital loss in absolute terms.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 21P: Bond Valuation and Changes in Maturity and Required Returns Suppose Hillard Manufacturing sold an...
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If Bond C is a 5% coupon, 10 year bond with a $1,000 face value and a 8% yield.  If interest rate goes to 10%, Bond C will experience a capital loss.  If interest rate goes down to 6%, Bond C’s capital gain:

Group of answer choices
 
A. is equaled to the capital loss in absolute terms
B. is less than the capital loss in absolute terms.
C. cannot be calculated.
D. is more than the capital loss in absolute terms.
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