The following information pertains to bonds:
Further following information is available about a particular bond ‘Bond F’
There is a 10.25% risky bond with a maturity of 2.25% year(s) its current price is INR105.31, which corresponds to YTM of 9.22%. The following are the benchmark YTMs.
Assuming the G-Sec has not changed from the time January 2013 to April 2013, what can you predict about the changes bond price and change in issues borrowing rates:
A . Decrease and Increase
B . Increase and Increase
C . Decrease and Decrease
D . Increase and Decrease
Answer: D