Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 12 percent to 8 percent. a. What is the bond price at 12 percent? b. What is the bond price at 8 percent? c. What would be your percentage return on investment if you bought when rates were 12 percent and sold when rates were 8 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) My Questions | bart!...Table 10-1 Bond price tableYield toMaturity2964966%7%8%9%10%11%12%13%14%16%- 20%25%(10% Interest Payment, 20 Years to Maturity)PV ofPV ofCouponsPrincipal$1,635.141,359.031,146.991,059.40981.81912.85851.36796.33746.94702.48662.31592.88486.96395.39table_10-1.jpg (556x...++fi+++++$672.97456.39Time & Attendance:311.80258.42214.55178.43148.64124.03103.6786.7872.7651.3926.0811.53666|| || || || || || || || || || || || || ||Bond Price$2,308.111,815.421,458.801,317.821,196.361,091.291,000.00920.37850.61789.26735.07644.27513.04406.92

The price of the bond is the PV future coupons and par value discounted at the YTM.

Answered: What is the bond price at 12 percent?…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

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ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 9FPE: Which of these two bonds offers the highest current yield? Which one has the highest yield to...

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Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 12 percent to 8 percent.

a. What is the bond price at 12 percent?

b. What is the bond price at 8 percent?

c. What would be your percentage return on investment if you bought when rates were 12 percent and sold when rates were 8 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

My Questions | bart!...
Table 10-1 Bond price table
Yield to
Maturity
296
496
6%
7%
8%
9%
10%
11%
12%
13%
14%
16%
- 20%
25%
(10% Interest Payment, 20 Years to Maturity)
PV of
PV of
Coupons
Principal
$1,635.14
1,359.03
1,146.99
1,059.40
981.81
912.85
851.36
796.33
746.94
702.48
662.31
592.88
486.96
395.39
table_10-1.jpg (556x...
+
+
fi
+
+
+
+
+
$672.97
456.39
Time & Attendance:
311.80
258.42
214.55
178.43
148.64
124.03
103.67
86.78
72.76
51.39
26.08
11.53
666
|| || || || || || || || || || || || || ||
Bond Price
$2,308.11
1,815.42
1,458.80
1,317.82
1,196.36
1,091.29
1,000.00
920.37
850.61
789.26
735.07
644.27
513.04
406.92

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