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Avalon inc offers a 6 percent coupon bond that has a 1000

Avalon Inc. offers a 6 percent coupon bond that has a $1,000 par value, semiannual coupon payments and a yield to maturity of 5.25 percent. The bond matures in 9 years.

What is the price of the bond?
What will happen to the price if market interest rates rise to 6.45 percent?

Based on your answers, what can you say about the relationship between the price of a bond and the market interest rate? Please show how you arrived at the answers.

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Finance Basics: Avalon inc offers a 6 percent coupon bond that has a 1000

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