Assume that three years ago, you purchased a 10-year corporate bond that pays 6 percent. The purchase price was $1,000. Also, assume that today comparable bonds are paying 8 percent.

a. What is the annual dollar amount of interest that you will receive from such bond investment?

b. Assuming that comparable bonds are paying 8 percent, what is the approximate dollar price for which that bond could be sold/bought for now?

c. In your own words, explain why the bond increased or decreased in value.