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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 9 percent to 8 percent.

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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 9 percent to 8 percent.

a.
What is the bond price at 9 percent?

Bond price $

b.
What is the bond price at 8 percent?

Bond price $

c.
What would be your percentage return on investment if you bought when rates were 9 percent and sold when rates were 8 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Enter the value as a positive amount.)

Return on investment % (Click to select)ProfitLoss

 
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