Problem 10 9 Interest rate effect LO3 Refer to Table 10 1, which is based on bonds paying 10 percent interest for 20 years Assume interest rates in the market (yield to maturity) increase from 9 to 12 percent a What is the bond price at 9 percent Bond price $ b What is the bond price at 12 percent Bond price $ c What would be your percentage return on the investment if you bought when rates were 9 percent and sold when rates were 12 percent (Do not round intermediate calculations Input your answer as a percent rounded to 2 decimal places Enter the value as a positive amount ) Return on investment (Click to select)ProfitLoss

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Question: Problem 10-9 Interest rate effect [LO3] Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates

Problem 10-9 Interest rate effect [LO3]

Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) increase from 9 to 12 percent.

a.	What is the bond price at 9 percent?

Bond price

b.	What is the bond price at 12 percent?

Bond price

c.	What would be your percentage return on the investment if you bought when rates were 9 percent and sold when rates were 12 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Enter the value as a positive amount.)

Return on investment

(Click to select)ProfitLoss

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