Problem $10-11($Algo$)$ Effect of maturity on bond price $[$LO$10-3]$

Refer to Table $10-2.$

Assume the interest rate in the market $($yield to maturity$)$ goes down to $8$ percent for the $10$ percent bonds. Using column $2,$ indicate what the bond price will be with a $5-$year, a $10-$year, and a $15-$year time period.

Assume the interest rate in the market $($yield to maturity$)$ goes up to $12$ percent for the $10$ percent bonds. Using column $3,$ indicate what the bond price will be with a $5-$year, a $10-$year, and a $15-$year period.

Assume the interest rate in the market $($yield to maturity$)$ goes down to $8$ percent for the $10$ percent bonds. If interest rates in the market are going down, which bond would you choose to own?

multiple choice $1$

$5$ Years

$10$ Years

$15$ Years

Assume the interest rate in the market $($yield to maturity$)$ goes up to $12$ percent for the $10$ percent bonds. If interest rates in the market are going up$,$ which bond would you choose to own?

multiple choice $2$

$5$ Years

$10$ Years

$15$ Years