(Bond valuabon) You own a bond that pays 5110 in annual interest, with a $1,000 par value. It matures in 15 years. Your required rate of return is 12 percent. a. Calculate the value of the bond b. How does the value change if your required rate of return (1) increases to 15 percent or (2) decreases to 6 percent? c. Explain the implications of your answers in part b as they relate to interest rate risk, premium bonds, and discount bonds d. Assume that the bond matures in 4 years instead of 15 years. Recompute your answers in part b. e. Explain the implications of your answers in part d as they relate to interest rate risk, premium bonds, and discount bonds a. If your required rate of return is 12 percent, what is the value of the bond? $(Round to the nearest cent.) b. What is the value of the bond if your required rate of return increases to 15 percent? $(Round to the nearest cent) What is the value of the bond if your required rate of retum decreases to 6 percent? $(Round to the nearest cent.) c. Based on the answers in part b, a decrease in interest rates (the required rate of return) will cause the value of a bond to by contrast, an increase in interest rates will cause the value to (Select from the drop-down menus.) Also, based on the answers in part b, if the required rate of return (current interest rate) (Select from the drop down menus) 1. Equals the coupon interest rate, the bond will sel at 2. Exceeds the bond's coupon rate, the bond will sell at 3. Is less than the band's coupon rate, the bond will sell at d. Assume the bond matures in 4 years instead of 15 years What is the value of the band if your required rate of return is 12 percent? $(Round to the nearest cent) What is the value of the bond if your required rate of return increases to 15 percent? $(Round to the nearest cent) What is the value of the bond if your required rate of return decreases to 5 percent? (Round to the nearest cent) e. From the findings in part d, we can conclude that a bondholder owning a long-term bond is exposed to interest rate risk than one owning a short-term bond Select from the drop-down menu)