CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

A bond is currently selling for $91.42. It is a 7% coupon bond, with payments made semi-annually, yielding 8.5% with eight years remaining to maturity. If yields were to increase by 1.5% immediately, what would this bond sell for?
A. $83.74
B. $100
C. $101.74
Explanation: N=16, I/Y=5, PMT=3.5, FV=100, PV=?= 83.74

User Contributed Comments 2

User Comment
jgraham6 no need to calculate on this one. because yields increase, therefore price of bond must decrease. A is the only option with a lower price. thus, process of elimination rules out the other possibilities. save 60 valuable seconds on the exam.
dipu617 good observation jgraham. :-)
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