Wine & Rose Inc. offers a 6 percent coupon bond that has a $1,000 par value, semiannual coupon payments and a yield to maturity of 5.43 percent. The bond matures in 9 years. • What is the price of the bond?
• What will happen to the price if market interest rates rise to 6.75 percent? Based on your answers, what can you say about the relationship between the price of a bond and the market interest rate?