Bonds A, B, and C all have a maturity of 15 years and a yield to maturity of 9%. Bond A's price exceeds its par value, Bond B's price equals its par value, and Bond C's price is less than its par value. Which of the following statements is CORRECT? a) Bond A has the most interest rate risk.
b) If the yield to maturity on the three bonds remains constant, the prices of the three bonds will remain the same over the next year.
c) If the yield to maturity on each bond increases to 8%, the prices of all three bonds will decline.
d) Bond C sells at a premium over its par value.
e) If the yield to maturity on each bond decreases to 6%, Bond A will have the largest percentage increase in its price.

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?