8. Go to Table 10-1 on page 291 which is based on bonds paying 10 percent interest...

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8. Go to Table 10-1 on page 291 which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 11 percent to 8 percent:

a. What is the bond price at 11 percent?

b. What is the bond price at 8 percent?

c. What would be your percentage return on investment if you bought when rates were 11 percent and sold when rates were 8 percent?

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Foundations Of Financial Management

ISBN: 9780073382388

13th Edition

Authors: Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen

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