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(Bond valuation? relationships) You own a bond that pays ?$ 110in annual? interest, with a ?$1,000 par value. It matures in 10years. The? market's required yield to maturity on a?comparable-risk bond is 10 percent.a.??What is the value of the bond if the?market's required yield to maturity on a? comparable-risk bond is10 ?percent????(Round to the nearest? cent.)b. ?(i)??What is the value ofthe bond if the yield to maturity on a? comparable-risk bondincreases to 14 ?percent? ???(Round to the nearest? cent.)b. ?(ii)??What is the value ofthe bond if the yield to maturity on a? comparable-risk bonddecreases to 8 ?percent??(Round to the nearest? cent.)c.??The change in the value of a bond caused bychanging interest rates is called? interest-rate risk. Based on theanswers in part b?,A decrease in interest rates? (the yield to? maturity) willcause the value of a bond to: (increase, be unchanged, ordecrease)??By? contrast, an increase in interest rates will cause thevalue to: (increase, be unchanged, or decrease)?
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