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Consider a $100 par value bond with a 7% coupon paid annually and five years to maturity. At a discount rate of 6.5%, the value of the bond today is $102.08. One day later, the discount rate increases to 7.5%. Assuming the discount rate remains at 7.5% over the remaining life of the bond, what is most likely to occur to the price of the bond between today and maturity? The price:
A
decreases then increases.
B
increases then decreases.
C
decreases then remains unchanged.