A bond has the following terms:

principal amount$1,000

semi-annual interest$50

maturity10 years

a. What is the bond's price if comparable debt yields 12%?

b. What would be the price if comparable debt yields 12% and the bond matures after five years?

c. What are the current yields and yields to maturityin a. and b.?

d. What would be the bond's price in a. and b. ifinterest rates declined to 8%?

e. What are the current yields and yield to maturityin d.?

f. What two generalizations may be drawn from the above price changes?