you are considering purchasing a consol

You are considering purchasing a consol that promises annual payments of $4. a. If the current interest rate is 2.5 percent, what is the price of the consol? Instructions: Enter your response to the nearest penny (two decimal places). The price of the consol is $ , ces b. You are concerned that the interest rate may rise to 4 percent. Compute the percentage change in the price of the consol and the percentage change in the interest rate. Compare themm. Instructions: Enter your response for dollar amounts rounded to the nearest penny (two decimal places ) and responses for percentages rounded to the nearest tenth (one decimal place). The new price of the consol would be $ The price of the consol falls by % and the interest rises by %. c. Your investment horizon is one year. You purchase the consol when the interest rate is 2.5 percent and sell t a year late following a rise in the interest rate to 4 percent What is your holding period return? Instructions: Enter your response rounded to the nearest tenth (one decimal place) Your holding period return is 23%