$($Bond valuation relationships$)$ A bond of Telink Corporation pays $$110$ in annual interest, with a $$1,000$ par value. The bonds mature in $10$ years. The market's required yield to maturity on a comparable$-$risk bond is $8$ percent.

a$.$ Calculate the value of the bond.

b$.$ How does the value change if the market's required yield to maturity on a comparable$-$risk bond $($i$)$ increases to $13$ percent or $($ii$)$ decreases to $6$ percent?

a$.$ What is the value of the bond if the market's required yield to maturity on a comparable$-$risk bond is $8$ percent?

$ $($Round to the nearest cent.$)$

b$.($i$)$ What is the value of the bond if the market's required yield to maturity on a comparable risk bond increases to $13$ percent?

$ $($Round to the nearest cent.$)$

b$.($ii$)$ What is the value of the bond if the market's required yield to maturity on a comparable risk bond decreases to $6$ percent?

$($Round to the nearest cent.$)$

$$ The change in the value of a bond caused by changing interest rates is called interest$-$rate risk. Based on the answers in part $b,$ a decreast rates $($the yield to maturity$)$ will cause the value of a bond to $$ ; by contrast, an increase in interest rates will cause the value to