(Bond valuation) Bellingham bonds have an annual coupon rate of 8 percent and a par value of $1,000 and will mature in 20 years. If you require a return of 12 percent, what price would you be willing to pay for the bond? What happens if you pay more for the bond? What happens if you pay less for the bond?

The price you would be willing to pay for the bond is $_____. (Round to the nearest cent.)

The bond is not an acceptable investment if you pay (less/more) for the bond because the expected rate of return for the bond is ( less/greater) than your required rate of return. (Select from the drop-down menus.)

(Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with an annual coupon rate of 16 percent and a maturity date of 18 years. When you bought the bond, it had an expected yield to maturity of 13 percent. Today the bond sells for $1,390.

What did you pay for the bond? $_____

If you sold the bond at the end of the year, what would be your one-period return on the investment? Assume that you did not receive any interest payment during the holding period. _____%