Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) increase from 2 to 6 percent.
a. What is the bond price at 2 percent?
b. What is the bond price at 6 percent?
c. What would be your percentage return on the investment if you bought when rates were 2 percent and sold when rates were 6 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Return on investment %