Assume that three years ago, you purchased a 10-year corporate bond that pays 9.5 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 your bond investment?

____________

b. Assuming that comparable bonds are paying 8 percent, what is the approximate dollar price for which you could sell your bond? ____________

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

Use the space below to show your work.