Question: Calculate the percentage change in the price over the course of a year for a bond with semi-annual coupon payments based on the following information:
Initial YTM = 6.875%
Coupon Rate = 4.5%
Time to maturity = 16 years
One year later: YTM = 8.85%
Answer choices:
Decrease by 18.17%
Decrease by 29.45%
Increase by 12.55%
Decrease by 16.73%
Not enough information
Increase by 11.98%