Assume that you purchased a $1,000 perpetual bond that pays a market i

Assume that you purchased a $1,000 perpetual bond that pays a market interest rate of 5 percent. If you attempted to sell this bond today subsequent to an increased market rate of interest of 7.5 percent, then you

a. could only sell this bond at a capital loss.
b. could sell this bond at a capital gain.
c. would not be able to sell this bond.
d. could exchange your bond yielding 5 percent for a bond yielding 7.5 percent on an even exchange basis.

ANSWER

A