4.) A bond that pays interest semiannually has a 6% promised yield and a price of $1045. Annual interest rates are now projected to increase 50 basis points. The bond's duration is 5 years. What is the predicted new bond price after the interest rate change?
A) $1020.35
B) $1069.65
C) $1070.36
D) $1019.64 (explanation: (-5/1.03) × 0.0050 × $1045) + $1045)
E) None of the above
