1. A $1000 bond has a coupon rate of 8 percent and matures after ten years.
a) What is the current price of the bond if the comparable rate of interest is 8 percent?
b) What is the current price of the bond if the comparable rate of interest is 10 percent?
c) What are the current yields given the prices determines in parts (a) and (b)?
d) Why are the prices in (a) and (b) and the current yields in (c) different?