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Assume that three years ago, you purchased a 10-year corporate bond that pays 5.40 percent. The purchase price was $1,000. Also assume that three years
Assume that three years ago, you purchased a 10-year corporate bond that pays 5.40 percent. The purchase price was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 5.00 percent. a. What is the annual dollar amount of interest that you receive from your bond investment? (Round your answer to 2 clecimal places. Omit the "$" sign in your response.) Amount of annual interest b. Assuming that comparable bonds are paying 5.00 percent, what is the approximate dollar price for which you could sell your bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Approximate market value c-1. Did the bond increase or decrease in value? Increased in value Decreased in value c-2. Why did the bond increase or decrease in value? Because market rates decreased Because market rates increased LA
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