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Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity)
Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 10 percent to 8 percent. a. What is the bond price at 10 percent? b. What is the bond price at 8 percent? c. What would be your percentage return on investment if you bought when rates were 10 percent and sold when rates were 8 percent? Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Table 10-1 Bond price table
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