Question: Refer to the table below, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to

Refer to the table below, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) increase from 8 to 12 percent.

What is the bond price at 8 percent?

What is the bond price at 12 percent?

What would be your percentage return on the investment if you bought when rates were 8 percent and sold when rates were 12 percent?

*****Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.

Refer to the table below, which is based on bonds

(10% Interest Payment, 20 Years to Maturity) Yield to PV of PV of Maturity Principal Bond Price Coupons $ 2% + $ 672.97 1, 635 . 14 = 2 , 308.11 4% 1, 359. 03 + 456 .39 1 , 815 . 42 6% 1, 146.99 + 311 . 80 = 1 , 458 . 80 7% 1, 059 . 40 + 258 . 42 = 1, 317 .82 8% 981.81 + 214.55 1, 196.36 9% 912 .85 + 178.43 = 1, 091 .29 10% 851. 36 + 148 .64 = 1 , 000.00 118 796.33 + 124 . 03 920.37 12% 746.94 103 .67 850 . 61 13% 702 . 48 + 86 . 78 789.26 14% 662 .31 + 72 . 76 735 .07 16% 592 . 88 + 51 . 39 = 644 .27 20% 486 .96 + 26 .08 513 . 04 25% 395.39 + 11 .53 = 406.92

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