Question: 1 ) Suppose you purchased a 2 0 - year bond four years ago at par. The bond pays annual interest, has a par value

1) Suppose you purchased a 20-year bond four years ago at par. The bond pays annual interest, has a par value of $1,000 and a coupon rate of 10%. Today, the bond has 16 years to maturity, the market rate of interest is 8% and you are considering selling the bond.
a. What was the market rate of interest at the time you purchased the bond? (1 Mark)
b. Suppose you wish to sell the bond today; how much should you sell the bond for? (6 marks)
c. What is the current yield of the bond today? (2 marks)

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