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(Related to Checkpoint 9.3) (Bond valuation relationships) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 10 years. The market's required yield to maturity on a comparable-risk bond is 11 percent. a. Calculate the value of the bond. b. How does the value change if the yield to maturity on a comparable-risk bond (i) increases to 15 percent or (ii) decreases to 6 percent? c. Explain the implications of your answers in part b as they relate to interest-rate risk, premium bonds, and discount bonds. d. Assume that the bond matures in 3 years instead of 10 years and recalculate your answers in parts a and b. e. Explain the implications of your answers in part d as they relate to interest-rate risk, premium bonds, and discount bonds. a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 11 percent? (Round to the nearest cent.) b. (i) What is the value of the bond if the yield to maturity on a comparable-risk bond increases to 15 percent? \$ (Round to the nearest cent.) (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) Fingen's 16-year, \$1,000 par value bonds pay 12 percent interest annually. The market price of the bonds is $930 and the market's required yield to maturity on a comparable-risk bond is 15 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? : (Round to two decimal places.) b. What should be the value of the Fingen bonds given your required rate of return on a comparable-bond? \$ (Round to the nearest cent)

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