*Multiple Choice* An investor buys a bond that has a coupon rate of 4%...
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Finance
*Multiple Choice*
An investor buys a bond that has a coupon rate of 4% with semiannual payments and remaining maturity of exactly 20 years. The investor pays a price for the bond that reflects a yield of maturity of 5.25%. Exactly one year later, the investor sells the bond for 95% of par value. Over the year, the bonds yield to maturity:
A) declined by 86 basis points.
B) declined by 306 basis points.
C) increased by 86 basis points
D) increased by 306 basis points.
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