c. Now assume Mrs. Pinson buys the bond at its current market value and holds it to maturity, what will be her percentage capital gain or loss? (Ignore any interest income received. Do not round intermediate calculations and input the amount as a positive percent rounded to 2 decimal places.) d. Why is the percentage gain larger than the percentage loss when the same dollar amounts are involved in parts b and c ? The percentage gain is larger than the percentage loss because the investment is larger. The percentage gain is larger than the percentage loss because the investment is smaller. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Appendix 1 & Present value o & L,PNe & PN=PV & {[(1+1]} & & & & & & & & \\ \hline \multirow[b]{2}{*}{ Period } & \multicolumn{12}{|c|}{ Percent } \\ \hline & 18. & 28 & 3% & 4) & 5% & 6x & 7x & 8 & 9% & 10x & 11x & 125 \\ \hline 1. & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0943 & 0.935 & 0926 & 0.917 & 0.909 & 0.901 & 0.893 \\ \hline 2 & 0.980 & 0961 & 0.943 & 0.925 & 0.907 & 0890 & 0.873 & 0.857 & 0.842 & 0.825 & 0812 & 0.797 \\ \hline 3 & 0.971 & 0942 & 0.915 & 0.889 & 0.864 & 0840 & 0.816 & 0.794 & 0.772 & 0.751 & 0.731 & 0.712 \\ \hline 4 & 0.961 & 0.924 & 0.888 & 0.855 & 0,823 & 0.792 & 0.763 & 0.735 & 0.708 & 0.683 & 0.659 & 0.636 \\ \hline 5. & 0951 & 0.906 & 0.863 & 0.822 & 0.784 & 0747 & 0.713 & 0681 & 0.650 & 0.621 & 0.593 & 0567 \\ \hline 6 & 0942 & 0888 & 0.837 & 0.790 & 0.746 & 0.705 & 0.666 & 0.630 & 0.596 & 0.564 & 0.535 & 0507 \\ \hline 7 & 0.933 & 0.871 & 0.813 & 0.760 & 0.711 & 0.665 & 0.623 & 0.583 & 0.547 & 0.513 & 0.482 & 0.452 \\ \hline 8 & 0.923 & 0.853 & 0.789 & 0.731 & 0.677 & 0.627 & 0582 & 0.540 & 0.502 & 0.467 & 0.434 & 0.404 \\ \hline 9 & 0.914 & 0837 & 0.766 & 0.703 & 0.645 & 0.592 & 0.544 & 0.500 & 0.460 & 0.424 & 0.391 & 0.361 \\ \hline 10 & 0905 & 0820 & 0.744 & 0.676 & 0.614 & 0.558 & 0.508 & 0.463 & 0,422 & 0.386 & 0.352 & 0.322 \\ \hline 11 & 0.896 & 0804 & 0.722 & 0.650 & 0.505 & 0.527 & 0.475 & 0.429 & 0.388 & 0.350 & 0.317 & 0287 \\ \hline 12 & 0.897 & 0.788 & 0.701 & 0.625 & 0.557 & 0.497 & 0.444 & 0.397 & 0.356 & 0.319 & 0.286 & 0.257 \\ \hline 13 & 0879 & 0.773 & 0.681 & 0.601 & 0.530 & 0.469 & 0.415 & 0.368 & 0.326 & 0.290 & 0.258 & 0.229 \\ \hline 14 & 0.070 & 0.758 & 0.661 & 0.577 & 0.505 & 0.442 & 0.388 & 0340 & 0.200 & 0263 & 0232 & 0.205 \\ \hline 15 & 0.861 & 0.743 & 0642 & 0.555 & 0.481 & 0.417 & 0.362 & 0.315 & 0.275 & 0.239 & 0.200 & 0.183 \\ \hline 16 & 0.1153 & 0,728 & 0.623 & 0.534 & 0.458 & 0.394 & 0.339 & 0.292 & 0.252 & 0218 & 0.188 & 0.163 \\ \hline 17 & 0.844 & 0.714 & 0.005 & 0.513 & 0.436 & 0.371 & 0317 & 0270 & 0.231 & 0.198 & 0.170 & 0.146 \\ \hline 18= & 0.836 & 0.700 & 0.587 & 0.494 & 0.416 & 0.350 & 0.206 & 0.250 & 0.212 & 0.180 & 0.153 & 0.130 \\ \hline 19 & 0.828 & 0.666 & 0.570 & 0.475 & 0.396 & 0.331 & 0.277 & 0.232 & 0.194 & 0.164 & 0.138 & 0.116 \\ \hline 20 & 0820 & 0.673 & 0.554 & 0.456 & 0.377 & 0.312 & 0.258 & 0.215 & 0.178 & 0.149 & 0.124 & 0.104 \\ \hline 25 & 0.780 & 0.610 & 0.478 & 0.375 & 0.295 & 0.233 & 0,184 & 0.146 & 0.116 & 0.092 & 0.074 & 0.059 \\ \hline 30 & 0.742 & 0.552 & 0.412 & 0.308 & 0.231 & 0.174 & 0131 & 0009 & 0075 & 0.057 & 0.044 & 0.033 \\ \hline 40 & 0672 & 0.453 & 0.307 & 0.208 & 0,142 & 0.097 & 0.067 & 0.046 & 0.032 & 0.022 & 0.015 & 0.011 \\ \hline 50 & 0.608 & 0.372 & 0.228 & 0.141 & 0087 & 0.054 & 0.034 & 0.021 & 0.013 & 0009 & 0.005 & 0.003 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline Appendita 8 feen & udes & resent value & of $1 & & & & & & & & & & \\ \hline \multirow[b]{2}{*}{ Penied } & \multicolumn{13}{|c|}{ Percent } \\ \hline & 13% & 14% & 15% & 16t & in & 18% & 19x & 20% & 25% & 10x & 35% & 40% & 50x \\ \hline 1 & 0.885 & 0.877 & 0.870 & 0.862 & 0855 & 0.847 & 0840 & 0.833 & 0800 & 0.769 & 0.741 & 0.714 & 0.667 \\ \hline 2 & 0.783 & 0769 & 0.756 & 0.743 & 0.731 & 0.718 & 0.706 & 0694 & 0.640 & 0.592 & 0.549 & 0.510 & 0.444 \\ \hline 3 & 0.693 & 0.675 & 0.658 & 0.641 & 0.624 & 0.609 & 0.593 & 0.570 & .0512 & 0.455 & 0.406 & 0.364 & 0296 \\ \hline 4 & 0613 & 0.592 & 0.572 & 0.552 & 0.534 & 0.515 & 0.499 & 0.482 & 0.410 & 0350 & 0.301 & 0.260 & 0,198 \\ \hline 5 & 0543 & 0519 & 0.497 & 0.476 & 0.456 & 0.437 & 0.419 & 0.402 & 0.328 & 0.269 & 0223 & 0.186 & 0.132 \\ \hline 6 & 0.480 & 0.456 & 0.432 & 0.410 & 0.390 & 0.370 & 0.352 & 0.335 & 0.262 & 0.207 & 0,165 & 0.133 & 0088 \\ \hline 7 & 0.425 & 0.400 & 0376 & 0.354 & 0333 & 0.314 & 0296 & 0.279 & 0.210 & 0.159 & 0.122 & 0.095 & 0059 \\ \hline 8 & 0.376 & 0.351 & 0.327 & 0.305 & 0285 & 0.266 & 0.249 & 0.233 & 0.168 & 0.123 & 0.091 & 0.066 & 0.039 \\ \hline 9 & 0333 & 0.308 & 0.284 & 0.263 & 0.243 & 0.225 & 0.209 & 0.194 & 0.134 & 0.004 & 0.067 & 0.040 & 0.026 \\ \hline 10 & 0.295 & 0.270 & 0.247 & 0.227 & 0.208 & 0.191 & 0.176 & 0.162 & 0.107 & 0.073 & 0050 & 0035 & 0017 \\ \hline 11 & 0.261 & 0.237 & 0.215 & 0.195 & 0.178= & 0.162 & 0.148 & 0.135 & 0.086 & 0056 & 0.037 & 0.025 & 0.012 \\ \hline 12 & 0231 & 0.208 & 0.187 & 0.168 & 0.152 & 0.137 & 0.124 & 0.112 & 0069 & 0043 & 0.027 & 0018 & 0008 \\ \hline 13 & 0.204 & 0.182 & 0,163 & 0.145 & 0.130 & 0.116 & 0.104 & 0093 & 0.055 & 0.033 & 0.020 & 0.013 & 0005 \\ \hline 14 & 0.181 & 0.100 & 0.141 & 0.125 & 0.111 & 0.099 & 0.088 & 0.078 & 0.044 & 0025 & 0.015 & 0.000 & 0.003 \\ \hline 15 & 0.160 & 0.140 & 0.123 & 0.108 & 0.005 & 0.084 & 0074 & 0.065 & 0.035 & 0020 & 0.011 & 0.006 & 0.002 \\ \hline 161= & 0.141 & 0.123 & 0.107 & 0.093 & 0.031 & 0.071 & 0.062 & 0.054 & 0.028 & 0.015 & 0.008 & 0.005 & 0002 \\ \hline 17 & 0.125 & 0.108 & 0.093 & 0080 & 0069 & 0.060 & 0.052 & 0.045 & 0.023 & 0.012 & 0006 & 0003 & 0001 \\ \hline 18 & 0.111 & 0.095 & 0081 & 0.069 & 0.059 & 0.051 & 0.044 & 0.038 & 0.018 & 0009 & 0005 & 0.002 & 0.001 \\ \hline 19 & 0.098 & 0.083 & 0.070 & 0.060 & 0.051 & 0.043 & 0.037 & 0.031 & 0.014 & 0007 & 0.003 & 0.002 & 0 \\ \hline 20 & 0.007 & 0.073 & 0.061 & 0.051 & 0043 & 0.037 & 0.031 & 0.026 & 0.012 & 0.005 & 0.002 & 0001 & 0 \\ \hline 25 & 0.047 & 0.038 & 0.030 & 0.024 & 0.020 & 0.016 & 0.013 & 0.010 & 0004 & 0.001 & 0.001 & 0 & 0 \\ \hline 30 & 0.026 & 0020 & 0015 & 0.012 & 0.009 & 0.007 & 0.005 & 0.004 & 0.001 & 0 & 0 & 0 & 0 \\ \hline 40 & 0008 & 0.005 & 0.004 & 0.003 & 0.002 & 0.001 & 0.001 & 0.001 & 0 & 0 & 0 & 0 & 0 \\ \hline 50 & 0.002 & 0001 & 0.001 & 0.001 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 \\ \hline \end{tabular} A $1,000 par value bond was issued five years ago at a 6 percent coupon rate. It currently has 25 years remaining to maturity. Interest rates on similar debt obligations are now 8 percent. Use Angendix B and ARRendix. D for an approximate answer but calculate your final answer using the formula and financlal calculator methods. a. Compute the current price of the bond using an assumption of semiannual payments. (Do not round intermediate calculations and round your answer to 2 decimal places.) b. If Mr. Robinson initially bought the bond at par value, what is his percentage capital gain or loss? (Ignore any interest income received, Do not round intermediate calculations and input the amount as a positive percent rounded to 2 decimal places.)