1. A $1,000 bond with a coupon rate of 6.2% paid semiannually has eight years to maturity and a yield to maturity (YTM) of 8.30%. If the YTM increases to 8.70%, what will happen to the price of the bond?
A. The price of the bond will fall by $18.93
B. The price of the bond will rise by $15.77
C. The price of the bond will fall by $20.96
D. The price of the bond will not change
2. What is the coupon rate of an eight year, $10,000 bond with semiannual coupons and a price of $9,006.66, if it has a yield to maturity of 6.5%?
A. 3.64%
B. 4.89%
C. 2.44%
D. 5.48%