As you browse opportunities for investment, you come across coupon bonds issued by Horsham Industries. The bonds have : Face Value =$100

Coupon rate=5.5% per annum, paid semi annually

Maturity=10 years

Current market price=$97.60

Yield to maturity=5.82%

At a required of return of 6.2%per annum, are you interested in buying the bonds? What is the maximum price you would pay for the bond?

If you purchased the Horsham bonds (part(a)) for $96.12 and the yield to maturity on the bonds has increased to 6.0% one year later, did you make a gain or a loss? How much?