What happens to the annual price of a four-year, P1,000 bond with an 8% annual coupon when interest rates change from 8% to 6%? Group of answer choices No change in price. A price increase of P69.30. A price decrease of P57.09. A price increase of P57.07.

What happens to the annual price of a four-year, P1,000 bond with an 8% annual coupon when interest rates change from 8% to 6%? Group of answer choices No change in price. A price increase of P69.30. A price decrease of P57.09. A price increase of P57.07.

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 1P

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Question

What happens to the annual price of a four-year, P1,000 bond with an 8% annual coupon when interest rates change from 8% to 6%?

Group of answer choices

No change in price.

A price increase of P69.30.

A price decrease of P57.09.

A price increase of P57.07.

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