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a. Assume the interest rate in the market (yield to maturity) goes down to 8 percent for the 10 percent bonds. Using column 2, indicate

a. Assume the interest rate in the market (yield to maturity) goes down to 8 percent for the 10 percent bonds. Using column 2, indicate what the bond price will be with a 1-year, a 10-year, and a 20-year time period. Maturity 1 year Book- 10 year 20 year int Bond Price b. Assume the interest rate in the market (yield to maturity) goes up to 12 percent for the 10 percent bonds. Using column 3, indicate what the bond price will be with a 1-year, a 10-year, and a 20-year period. Maturity 1 year 10 year 20 year Bond Price c. Assume the interest rate in the market (yield to maturity) goes down to 8 percent for the 10 percent bonds. If interest rates in the market are going down, which bond would you choose to own? 1 Year 10 Year 20 Year

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