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2 . Cameron Corporation is offering a new bond issue. It has a $ 1 0 0 0 par value, an 8 % coupon rate

2. Cameron Corporation is offering a new bond issue. It has a $1000 par value, an 8% coupon rate and pays annual interest. It has a 9 year term. Current market interest rates have fallen to 7% during the regulatory filings for the bond.
a. Based on current conditions, what will the market price of Camerons bonds be?
b. You bought one of the bonds at issue but one year later need cash and have to sell it. Now the current market rate of interest is 6%. What will your bond price be under these conditions?
c. Based on (a) and (b), what would your one year return on your investment be?

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