Table Games Corp. (TGC) has an outstanding bond with a $1,000 face value and a 9 percent coupon rate of interest (paid semiannually). The bond, which was issued 22 years ago, matures in eight years.

1) Explain how bond prices are determined.

2) If investors require a return equal to 4.5 percent to invest in similar bonds, what is the market value of TGC bond? Show your work.