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(Bond valuation​ relationships) You own a bond that pays ​$ 110 in annual​ interest, with a...

(Bond valuation​ relationships) You own a bond that pays ​$ 110 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 10 percent.

a.  What is the value of the bond if the​ market's required yield to maturity on a​ comparable-risk bond is 10 ​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 14 ​percent?   

​(Round to the nearest​ cent.)

b. ​(ii)  What is the value of the bond if the yield to maturity on a​ comparable-risk bond decreases to 8 ​percent?

​(Round to the nearest​ cent.)

c.  The change in the value of a bond caused by changing interest rates is called​ interest-rate risk. Based on the answers in part b​,

A decrease in interest rates​ (the yield to​ maturity) will cause the value of a bond to: (increase, be unchanged, or decrease)?

​By​ contrast, an increase in interest rates will cause the value to: (increase, be unchanged, or decrease)?

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