Suppose Ford Motor Company sold an issue of bonds with a 10-year maturity, a $1,000 par value, a

10 percent coupon rate, and Semiannual interest payments.

A. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 6

percent. At what price would the bonds sell?

B. Suppose that, 2 years after the initial offering, the going interest rate had risen to 12 percent. At what

price would the bonds sell?