A bond's credit rating provides a guide to its price. In December 2020, Aaa bonds yielded 1.29% and Baa bonds yielded 3.11%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what would be the likely effect on the bond price? (Assume annual coupons.)

a. Do you expect its present value to go "down", "up", or stay the "same"?

b. What is the present value of the bond price when it had an Aaa rating? $

c. What is the present value of the bond price after it is downgraded? $