Approximate dollar price for which you could sell your bond

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Reference no: EM131011425

Assume that three years ago, you purchased a corporate bond that pays 5.50 percent. The purchase price was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 6.00 percent. (a) What is the annual dollar amount of interest that you receive from your bond investment? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Amount of annual interest $ (b) Assuming that comparable bonds are paying 6.00 percent, what is the approximate dollar price for which you could sell your bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Approximate market value $ (c-1) Did the bond increase or decrease in value? Decreased in value Increased in value (c-2) Why did the bond increase or decrease in value? Because market rates increased Because market rates decreased

Reference no: EM131011425

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