BV1: You own a bond that pays 70$ in annual interest, with a 1000$ par value. It matures in 15 years. Your required rate of return is 7%. - BV1-a: Calculate the value of the bond. - BV1-b: How does the value change if your required rate of return (i) increases to 9% or (ii) decreases to 5% ? - BV1-c: Explain the implications of your answers in part BV1-b as they relate to interest rate risk, premium bonds, and discount bonds. - BV1-d: Assume that the bond matures in 5 years instead of 15 years. Recompute your answers in part BV1-b. - BV2-a: Calculate the value of a bond that will mature in 16 years and has a 1000$ face value. The yearly coupon interest rate is 4.5%, and the investor's required rate of return is 6%. BV3: Trico bonds have an annual coupon rate of 8% and a par value of 1000$ and will mature in 20 years. - BV3-a: If you require a return of 7%, what price would you be willing to pay for the bond? - BV3-b: What happens if you pay more for the bond? - BV3-c: What happens if you pay less for the bond