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Determining Interest and Approximate Bond Value. Assume that three years ago, you purchased a corporate bond that pays 9.5 percent. The purchase price was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 8 percent.

a. What is the annual dollar amount of interest that you will receive from your bond investment?

b. Assuming that comparable bonds are paying 8 percent, what is the approximate dollar price for which you could sell your bond?

c. In your own words, describe why your bond increased or decreased in value.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M941826

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