Here are data on

$1,000

par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions:

Here are data on $1,000 per value bonds issued by Microsoft, GE Capital and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions: 1. Assuming interest is paid annually , calculate the values of the bonds if your required rates of return are as follows: Microson. 5 percent: GE Capital, 15 percent; and Morgan Stanley, 95 percent, where 0 b. The bonds are selling for the following amounts Microsoft $940 GE Capital $543 Morgan Stanley 5848 What are the expected rates of return for each bond? c. How would the value of the bonds change if (1) your required fate of return to increased 2 percentage points or (2) decreased 2 percentage points? d. Explain the implications of your answers in part(e) in forms of interest rate risk, premium bonds, and discount bonds 6. Should you buy the bonds? Explain MICROSOFT GE CAPITAL MORGAN STANLEY Coupon interest rate 5.25% 7.00% 8.50% Years to maturity 25 23 12 (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.)