A) 1.2% B) 2.4% C) 3.6% D) 4.8%
A company has a $100 million bond issue outstanding with a 5-year maturity and a 6% coupon rate. The bond is trading at 95. The company's credit rating has recently been downgraded, which is expected to increase the bond's yield to maturity. If the bond's yield to maturity increases by 50 basis points, what is the expected change in the bond's price? cfa level 2 mock questions
A) $200,000 B) $300,000 C) $400,000 D) $500,000 000 B) $300