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Refer to Table 10-1, which is based an bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yieid to maturity)

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Refer to Table 10-1, which is based an bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yieid to maturity) decrease from 12 to 10 percent. a. What is the bond price at 12 percent? Answer is complete and correct. Bond price s 850.61 b. What is the bond price at 10 percent? Answer is complete but not entirely correct. c. What would be your percentage return on the investment if you bought when rates were 12 percent and sold when rates were 10 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Table 10-1 Bond price table \begin{tabular}{crrrrr} \multicolumn{7}{c}{ (10\% Interest Payment, 20 Years to Maturity) } \\ \hline YieldtoMaturity & PVofCoupons & PVofPrincipal & \\ \hline 2% & $1,635.14 & + & $672.97 & = & Bond Price \\ \hline 4% & 1,359.03 & + & 456.39 & = & $2,308.11 \\ 6% & 1,146.99 & + & 311.80 & = & 1,815.42 \\ 7% & 1,059.40 & + & 258.42 & = & 1,458.80 \\ 8% & 981.81 & + & 214.55 & = & 1,317.82 \\ 9% & 912.85 & + & 178.43 & = & 1,196.36 \\ 10% & 851.36 & + & 148.64 & = & 1,091.29 \\ 11% & 796.33 & + & 124.03 & = & 1,000.00 \\ 12% & 746.94 & + & 103.67 & = & 920.37 \\ 13% & 702.48 & + & 86.78 & = & 850.61 \\ 14% & 662.31 & + & 72.76 & = & 789.26 \\ 16% & 592.88 & + & 51.39 & = & 735.07 \\ 20% & 486.96 & + & 26.08 & = & 644.27 \\ 25% & 395.39 & + & 11.53 & = & 513.04 \\ \hline & & & & & 406.92 \\ \hline \end{tabular}

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