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    Interest rate levels

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    Explain how a decrease in the general level of interest rates affects the valuation of a firm's bonds. To prove this statement solve and answer the following:

    I have $1,000 bind paying 12 percent interest that has 10 years to maturity. If the current interest rates are 10 percent, will a prudent investor pay me more than $1,000 for my bond? Why?

    Show your work and how you can compute it on the calculator.

    © BrainMass Inc. brainmass.com March 4, 2021, 6:03 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/interest-rate-levels-25813
    $2.49

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