Assume interest rates in the market yield to maturity, Financial Management

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Assume interest rates in the market yield to maturity

Which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 12 percent to 10 percent.

a. What is the bond price at 12 percent? Bond price

b. What is the bond price at 10 percent? Bond price

c. What would be your percentage return on investment if you bought when rates were 12 percent and sold when rates were 10 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Returned on Investment %

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Financial Management: Assume interest rates in the market yield to maturity

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