Final answer:
When the yield to maturity of a bond rises, the price at which it will trade decreases.
Step-by-step explanation:
The price at which a bond will trade when the yield to maturity rises can be determined by considering the relationship between bond prices and interest rates. When interest rates rise, the price of previously issued bonds decreases. In this case, the bond has a face value of $1,000 and an interest payment of $80. The yield to maturity is 12% and there is only one year left until maturity. To make the bond attractive to investors, the seller will lower its price below the face value of $1,000.