A) You own a bond that pays $100 in annual interest with a $1,000 par value. It matures in 5 years. Your required rate of return is
1) 12 percent
2) 10 percent
3) 8 percent
B) How does A) change if we change our maturity to 10 years and the required return is
1) 12 percent
2) 10 percent
3) 8 percent
C) How does A) change if we change our maturity to 20 years and the required return is
1) 12 percent
2) 10 percent
3) 8 percent