Your firm, Nurse International has identified investments for your hospital and long term, fixed income bonds. Your boss is expecting you to complete a comprehensive, analytical, response to this project. Assume your firm sold bonds that have a ten year maturity, a 12% coupon rate with annual payments, and $1000 dollar par value.

a) Suppose that two years after the bonds were issued, the required interest rate fell to 7%. What would be the bonds value?

b) Suppose that two years after the bonds were issued, the required interest rate fell to 13%. What would be the bonds value?

c) What would be the value of the bonds three years after issue in each scenario above, assuming that the intrest rates stayed steady at 7% or 13%

b