1. Julie bought a 20-year bond when it was issued by Seally Inc. 5 years ago (NOTE: the bond was issued 5 years ago. In calculating price today, remember it has only 15 years remaining to maturity). The bond has a $1,000 face value, an annual coupon rate equal to 6 percent and the coupon is paid every six months. If the yield on similar-risk investments is 7 percent,
   1. What is the current market value (price) of the bond?
   2. Suppose interest rate levels rise to the point where such bonds now yield 9 percent. What would be the price of Octodan bond?
   3. At what price would Octodan bonds sell if the yield on them was 5 percent?
   4. What do you observe regarding the relationship between interest rate (YTM) bonds price?
   5. What do you observe regarding the relationship between coupon, YTM and the bonds price?