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A $1,000 par value bond was issued five years ago at a 10 percent coupon rate. It currently has 20 years remaining to maturity. Interest

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A $1,000 par value bond was issued five years ago at a 10 percent coupon rate. It currently has 20 years remaining to maturity. Interest rates on similar debt obligations are now 12 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the current price of the bond using an assumption of semlannual payments. Note: Do not round intermediate calculations and round your answer to 2 decimal places. b. If Mr. Robinson initially bought the bond at par value, what is his percentage capital gain or loss? Note: Ignore any interest income recelved. Do not round intermediate calculations and round your answer to 2 decimal places. c. Now assume Mrs. Pinson buys the bond at its current market value and holds it to maturity, what will be her percentage capital gain or loss? Note: Ignore any interest income received. Do not round intermediate calculations and round your answer to 2 decimal places. Answer is complete but not entirely correct. b. If Mr. Robinson initially bought the bond at par value, what is his percentage capital gain or lass? Note: ignore any interest income received. Do not round intermediate calculations and round your answer to 2 decimal places. c. Now assume Mrs. Pinson buys the bond at its current market value and holds it to maturity, what will be her percentage capital gain or loss? Note: Ignore any interest income received. Do not round intermediate calculations and round your answer to 2 decinal places. d. Why is the percentago gain larger than the percentage loss when the same dollar amounts are imolved in parts b and c ? The percentage gain is larger than the percentage loss because the irvestment is large: The percentage gain is larger than the percentage loss because the investment is smaller

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