Suppose OnBoard Dynamics sold issued bonds with a 15-year maturity, a $1,000 par value, a 12% coupon rate, and semiannual payments.

(a) Two years after the bonds were issued, the market rate of interest on bonds such as these fall to 10% per year compounded semi-annually. At what price would the bonds sell?

(b) Two years after the bonds were issued, the market rate of interest on bonds such as these rose to 14% per year compounded semi-annually. At what price would the bonds sell?

(c) After 2 years, the closing price of the bond is $783.58. What is the effective annual current yield? (calculate by hand calculator) What is the effective yield to maturity on an annual basis? (calculate latter with excel)