Your parents own the following two bonds: 30-year, $1,000 face value, paying $70 at the end of each year, with a yield to maturity (YTM) of 7%l 2-year, $1,000 face value, paying $60 at the end of each year with a YTM of 6%. Both currently sell at par. If you are concerned that interest rates may increase by three percentage points, you will advise them to: sell the 2-year and buy additional 30-year bonds sell the 30-year and buy additional 2-year bonds withdraw funds from the bank to buy more bonds sell both bonds and put the money in a saving account. Which of the following two bonds will you prefer to buy, other things equal, if you are in the 30% marginal tax bracket: AAA-rated corporate that pays $100 interest each year; AAA-rated municipal that pays $74 each year. The corporate the municipal. What rate of return do you expect to earn if you pay $39 for zero-coupon bond that matures in 30-years and has a face value of $1,000? 7.06% 5.99 8.11 11.42 10 What is the highest price any one should pay today for a 20-year, $1,000 par value bond that pays $62 in interest at the end of each year, if the current market rate of interest is 4%? $1,000 960.34 1, 129.12 1, 298.99 What is the highest price any one should pay today for a 20-year, zero coupon bond if the current market rate of interest is 4%? $1000 456.39 701.12 612.15