$($Bond valuation relationships$)$ A bond of Visador Corporation pays $$80$ in annual interest, with a

$$1,000$ par value. The bonds mature in $16$ years. The market's required yield to maturity on

a comparable$-$risk bond is $9\mathrm{.}5$ 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 $12$ percent or $($ii$)$ decreases to $5$ percent?

c$.$ Interpret your finding in parts a and $b.$

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

$9\mathrm{.}5$ 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 $12$ 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 $5$ percent?

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

c$.$ 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 decrease in interest rates $($the yield to maturity$)$ will cause the value $0$