A $1,000 par value bond was issued five years ago at a 8 percent coupon rate. It currently has 10 years remaining to maturity. Interest rates on similar debt obligations are now 10 percent. Use Appendix B and Appendix 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 semiannual payments. (Do not round intermediate calculations and round your answer to 2 decimal places.) Answer is complete but not entirely correct. Current bond price $ 900.00 b. If Mr. Robinson initially bought the bond at par value, what is his percentage capital gain or loss? (ignore any interest income received. Do not round Intermediate calculations and input the amount as a positive percent rounded to 2 decimal places.) Answer is complete but not entirely correct. gain 825 Percentage 0 o search A $ a O L O 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? (Ignore any interest income received. Do not round intermediate calculations and input the amount as a positive percent rounded to 2 decimal places.) Percentage d. Why is the percentage gain larger than the percentage loss when the same dollar amounts are involved in parts b and c? The percentage gain is larger than the percentage loss because the investment is larger The percentage gain is larger than the percentage loss because the investment is smaller to search delete Appendix 3 Present value of $1, PV Period 4% 10% 0.935 0.901 0.812 0.731 3% 0.971 0.943 0.915 0388 0363 0837 0.813 0.789 0.766 0.744 0722 0701 0.681 0.661 0642 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0677 0 645 0614 OSS 0557 0.943 0.890 0340 0.792 0.747 0.705 0.665 0.627 0.592 0558 0.962 0.925 0.889 0855 0822 0.790 0.760 0.731 0.703 0.676 0650 0625 0.001 0.577 0.917 0842 0.772 0709 0.550 0596 0547 0.502 0713 0 666 0.909 0.826 0.751 0683 0.621 0.564 0513 0.467 0.623 0.893 0.797 0712 0636 0567 0507 0452 0.404 0361 0122 0287 0.582 1% 2% 0.990 0.980 0.980 0.961 0.971 0.942 0.961 0.924 0.951 0.906 0.942 0.888 0.933 0.871 0.923 0.853 0.914 0.837 0.905 0.820 0.896 0.504 0887 0.788 0.879 0.773 0.870 0.758 0 361 0743 0853 0.728 0.844 0.714 0.836 0.700 0.828 0586 0320 0673 070 0610 0742 0.552 0672 0.003 0372 0.926 0.857 0.794 0735 0681 0.630 0.583 0.540 OSO 0.463 0420 0.39 0.00 6340 0315 0792 0270 0.460 0593 053 0.482 0.434 0191 0352 0317 020 0258 0508 0422 04497 0469 0.350 0.319 0200 0.30 0.205 0530 0 505 0.481 0458 0675 0444 0.415 0.388 0362 0339 0317 0.296 0277 0.25 0.184 0.356 0.326 0.299 0.275 0252 0231 0212 0.194 0.17 0115 075 DO D013 1 150 O 124 0605 0587 0.570 0554 0673 0412 0416 0396 0513 0494 0475 0456 0.375 08 0208 020 158 OTO 0.164 140 0002 04 0050 0350 0331 0312 0213 0.174 0 097 022 015 0.140 000 0045 DOT 231 0.142 DOT 0015 0005 0054 0034 ppendix B (concluded) Present value of $1 Percent Period 0 13% 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0 111 0.098 0.087 0.047 0026 0.008 0.002 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.038 0.020 0.005 0.001 15% 16% 179 0.870 0.862 0.855 0.756 0.743 0.731 0.658 0.641 0.624 0.572 0.552 0.534 0.497 0.476 0.456 0.432 0.410 0,390 0.376 0.354 0.333 .327 0.305 0.285 0.284 0.263 0.243 0.247 0227 0208 0.215 0.195 0.178 0.187 0.168 0.152 0.163 0.145 0.130 141 0.125 0111 0.123 0.108 0.005 0.107 0.093 0.081 0.093 0.0800069 0 081 00690059 0.070 0.060 0 051 0.061 0.051 0.043 0.030 0024 0.020 00150012 0.009 0004 0.003 0.002 0.001 0.001 0 19% 20% 25% 30% 35% 40% 50% 0.847 0.840 0.833 0.800 0.769 0.741 0.714 0.667 0.7180.706 0.694 0.640 0592 0.549 0.510 0.444 0.6090.593 0.5790.512 0.455 0.406 0.364 0.296 0.515 0.499 0.482 0.4100.350 0.301 0.2600198 0.437 0.419 0.402 0.328 0.269 0223 0.136 0.132 0.370 0.352 0.335 0.262 0.207 0.165 0.133 0088 0.314 0.296 0279 0.210 0.159 0.122 0095 0.059 0 266 0249 0.233 0.168 0.123 0.091 0.068 0.019 0.225 0.200 0.194 0.134 0.094 0.0670048 0026 0.19 0.176 0.162 0.107 0073 00500055 0017 0.162 0.148 0.135 0.006 0056 0037 0025 0012 0.137 0.124 0.112 0069 0047 002 001 000 .116 0.104 0.093 0.055 0.033 0020 0.01) 0005 0099 OORS 003 0044 002 0015 0000 000 0.084 0074 0065 0.035 0.020 0011 000 0002 0.0710.062 0.054 0.028 0015 0.008 0.00 0.002 0.060 0,0520045 0.023 0.012 0006 00030001 0.051 0.044 O OB 0018 0.0090005 0002 0001 0.043 00370031 0014 0.007000300020 0.031 0026 0.037 0012 0005 0 0001 0.002 0016 0013 0010 0.00 0.00100010 0.005 0.007 0.004 0 0.001 0 0.001 0.001 0.001 0 0 0