Question: Answer letter E only! b. The bonds are selling for the following amounts: What are the expected rates of return for each bond? c. How

Answer letter E only! b. The bonds are selling for the following

Answer letter E only!

b. The bonds are selling for the following amounts: What are the expected rates of return for each bond? c. How would the value of the bonds change if (1) your required rate of return (rb) increased 2 percentage points or (2) decreased 2 percentage points? d. Explain the implications of your answers in part c in terms of interest rate risk, premium bonds, and discount bonds. e. Should you buy the bonds? Explain

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