1.Pricing a Bond. If a bond promises to pay $150 next year and the interest rate is 7 percent per year: a. What will the price of the bond be? b. What will the new price of the bond be if the interest...

1.Pricing a Bond. If a bond promises to pay $150 next year and the interest rate is 7 percent per year:

a. What will the price of the bond be?

b. What will the new price of the bond be if the interest rate rises to 9 percent?

2. Buy or Sell Bonds? If you strongly believed the Federal Reserve was going to surprise the markets and raise interest rates, would you want to buy bonds or sell bonds?