Fix- It Inc. recently issued 10- year, $ 1,000 par value bonds at an 8% coupon rate.
Two years later, similar bonds are yielding investors 6%. At what price are Fix- Its bonds selling?
What would the bonds be selling for if yields had risen to 12%?
Assume the conditions in part a. Further assume interest rates remain at 6% for the next 8 years. What would happen to the price of the Fix- It bonds over that time?
