(Expected rate of return) Assume you own a bond with a market value of $820 that matures in 7 years. The par value of the bond is $1,000. Interest payments of $30 are paid semiannually. What is your expected rate of return on the bond? Your expected rate of return on the bond is. %. (Round to two decimal places.) (Yield to maturity) You own a 14-year bond that pays 9 percent interest annually. The par value of the bond is $1,000 and the market price of the bond is $1,050. What is the yield to maturity of the bond? The yield to maturity of the bond is %. (Round to two decimal places.) Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions i a. Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows Microsoft 7 percent; GE Capital, 16 percent, and Morgan Stanley 11 percent, where b. The bonds are selling for the following amounts Microsoft GE Capital Morgan Stanley S773 $770 $383 What are the expected rates of return for each bond? c. How would the value of the bonds change if (1) your required rate of return (ro) increased 2 percentage points or (2) decreased 2 percentage points? d. Explain the implications of your answers in part (c) in terms of interest rate risk, premium bonds, and discount bonds. e. Should you buy the bonds? Explain. (Bond relationship) Mason, Inc. has two bond issues outstanding, called Series A and Series B, both paying the same annual interest of $105. Series A has a maturity of 12 years, whereas Series B has a maturity of 1 year. a. What would be the value of each of these bonds when the going interest rate is (1) 6 percent, (2) 11 percent, and (3) 14 percent? Assume that there is only one more interest payment to be made on the Series B bonds. b. Why does the longer-term (12-year) bond fluctuate more when interest rates change than does the shorter-term (1-year) bond? a. When the going interest rate is 6 percent, the value of Series A bonds would be $ (Round to the nearest cent.)