10. ties available to investors c. Esplain the resalts of parts (a) and (o) in terms of opporrun d. What is the price today if che interest rate is 109%2 e. Comment on the answer to part (d). b. What is the price today if the interest rate is 8%? the following conditions. 2. Calculane the market price of a $1,000 face value bood under Current Market Rate 10% 12 Coupon Rate Time Until Maturity 12% 15 years 25 30 d. 3. What is the current yield on each of the bonds in the previous problem rate of6%. Today's interest tare is 10%. a. What is the bond's current price if inscrest is paid scmiannually as it is on most bonds? h. What is the price if the bond's interest is paid anoually? Comment on the difference berween (a) c. What would the price be if interest was paid semiannually and the bond was issued at a face value 5. Frk Inc. recently issacd 10-year, $1,000 par value bonds at an 8% coupon rate. $1.500 a. Two years later, similar bonds are yielding investors 6%. At what price are Fix-It's bonds selling? b. What would the bonds be selling for if yields had risen to 12962 Assume the conditions in pari Further assume interest rates remain at 6% for the next 8 years. Whe c would happen to the price of the Fix-It bonds over that time 6. The Mariposa Co. has two bonds outstanding. One was issued 25 years ago at a coupon rate of 99,The 'A other was issued 5 years ago at a coupon rate of 9%. Both bonds were originally issued with terms of years and face values of $1,000. The going interest rate is 14% today a. What are the prices of the two bonds at this time b. Discuss the result of part (a) in terms of risk in investing in bonds. 7. Longly Trucking is issuing a 20-year bond with a $2,000 face value tomorrow. The issue is to pay an coupon rate, because that was the interest rate while it was being planned. However, rates increased su denly and are expected to be 9% when the bond is marketed. What will Longly receive for each bond tomorrow 8. Daubert, Inc planned to issue and sell at par 10-yecar, $1,000 face value bonds totaling $400 mort. The bonds have been printed with a 6%coupon rate. Since that printing, however, Moody, downgraded Daubert's bond rating from Aaa to Aa. This means the bonds will have to be offered to buyers 7%, How much less than it expected will Daubert collect when the bonds are issued? Ignore administrative costs and commissions. 9. Tutak Industries issued a $1,000 face value bond a number of years ago that will mature in eight yn Similar bonds ar yielding 8 and che Tu akbond is currently selling for S1 291.31. Compute theo rate on this bond. (In practice we gencrally aren't asked to find for the coupon payment.) coupon rates.) (Hint: Substitute and s