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2) Refer toTable 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity)
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Refer toTable 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 9 percent to 8 percent. |
a. | What is the bond price at 9 percent? |
Bond price | $ |
b. | What is the bond price at 8 percent? |
Bond price | $ |
c. | What would be your percentage return on investment if you bought when rates were 9 percent and sold when rates were 8 percent?(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Enter the value as a positive amount.) |
Returnon investment | % | (Click to select)ProfitLoss |
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