Assume that three years ago, you purchased a corporate bond that pays 5.30 percent. The face value

Question:

Assume that three years ago, you purchased a corporate bond that pays 5.30 percent. The face value of the bond was$1,000. Also assume that three years after your bond investment,comparable bonds are paying 6.40 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 6.40 percent, what is the approximate dollar price. for which you could sell your bond?

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

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...