Suppose today you own a bond that matures in three years, has a current yield of 5%, a face value of $1000, and sells for $900 today. If next year interest rates are 10% what is the price of the bond next year and do you sell the bond next year or not?
A. Next year the bond will sell at a price of $913.22 and you will sell the bond next year.
B. Next year the bond will sell at a price of $913.22 and you will not sell the bond next year.
C. Next year the bond will sell at a price of $953.38 and you will sell the bond next year.
D. Next year the bond will sell at a price of $953.38 and you will not sell the bond next year.