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Part III: 15 point questions-do 3 of the following 5 questions. Show all set up and work for credit All interest rate problems must be

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Part III: 15 point questions-do 3 of the following 5 questions. Show all set up and work for credit All interest rate problems must be carried at least 5 decimal places and left in % form. Financial calculator answers for present value will not be accepted. All answers must be legible to receive credit. Partial credit is awarded. 1. Seven years ago you bought a $600,000, 15-year, deep discount bond with a market interest rate of 5.90%. Since then market rates have fallen to 5 15% and you find that you must sell the bond. What was the initial price of the bond? b. What is the current price of the bond? Calculate the current annual rate of retum on this instrument and compare it to the annual rate of return you were expecting. d. Explain whether your return would have been relatively greater or less if you held originally purchased a 25-year instrument. Support your conclusion with the appropriate work. Part III: 15 point questions-do 3 of the following 5 questions. Show all set up and work for credit All interest rate problems must be carried at least 5 decimal places and left in % form. Financial calculator answers for present value will not be accepted. All answers must be legible to receive credit. Partial credit is awarded. 1. Seven years ago you bought a $600,000, 15-year, deep discount bond with a market interest rate of 5.90%. Since then market rates have fallen to 5 15% and you find that you must sell the bond. What was the initial price of the bond? b. What is the current price of the bond? Calculate the current annual rate of retum on this instrument and compare it to the annual rate of return you were expecting. d. Explain whether your return would have been relatively greater or less if you held originally purchased a 25-year instrument. Support your conclusion with the appropriate work

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