37. Assume initially that market interest rates are 7% and the bondholder is receiving a $70 coupon payment
per year on a bond with a face value of $1,000. If market interest rates rise to 8%, the bond price:
A) falls to $875. B) falls to $800. C) rises to $1,125. D) falls to $700.
38. Assume that market interest rates are 6% and the bondholder receives a $60 coupon payment per year on
a bond with a face value of $1,000. If market interest rates fall to 4%, the bond price:
A) rises to $1,400. B) rises to $2,000. C) falls to $500. D) rises to $1,500.
39. How much is a bond worth if it pays $55 per year in interest and the market interest rate is 8%?
A) $440 B) $687.50 C) $787.60 D) $1,250