Assume that three years ago, you purchased a 10-year corporate bond that pays 5.5 percent. The purchase price was $1,000. Also, assume that today comparable bonds are paying 4.5 percent. a) What is the annual dollar amount of interest that you receive from your bond investment? (Omit the "$" sign in your response.) Amount of interest $ b) Assuming that comparable bonds are paying 4.5 percent, what is the approximate market price for which you could sell your bond? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Market price $ c-1) Did the bond increase or decrease in value?

multiple choice 1

Decreased in value.

Increased in value.

c-2) Why did the bond increase or decrease in value?

multiple choice 2

Because market rates decreased.

Because market rates increased.