Question

Bond Interest Rate

A bond with 10 years until maturity, an 8% coupon, and an 8% yield to maturity increased in price to $1,107.83 yesterday. What apparently happened to interest rates(show your calculations)?

Answer: A. Rates increased by 2.0%. B. Rates decreased by 2.0%
C. Rates increased by .72%. D. Rates decreased by 1.5%
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