Question: Suppose you have a $2000 bond that makes an annual interest payment of $75. Use this information to answer the following questions. (a) Suppose the

Suppose you have a $2000 bond that makes an annual interest payment of $75. Use this information to answer the following questions.

(a) Suppose the current interest rate is 6%. What would be the market price of the bond?

(b) Suppose the interest rate lowered to 3.75%. What would be the market price of the bond?

(c) Suppose the interest rate lowered even further to 2%. What would be the market price of the bond?

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