Final answer:
A bond with a maturity date of '07' likely matures in 2007 in the given context, but you need the century for full confirmation. If interest rates rise to 9%, the bond's market price would likely decrease. To calculate the purchase price, you would discount the bond's future cash flows at the current market rate of 9%.
Step-by-step explanation:
If a bond report states a maturity date of '07', this typically indicates the bond will mature in the year ending with those two digits, and you would need the century context to determine the full year. However, given that your question provides an example related to a ten-year bond issued at an interest rate of 6%, which you are considering buying one year before its maturity, we can infer that if the bond was issued in the current century, the mature year would be 2007. Nevertheless, without a century context, it could also be 1907, 2107, etc.
If interest rates increase to 9%, this generally means you could expect to pay less than the bond's face value of $10,000 because the bond's fixed interest payments are less attractive compared with the new higher interest rates available in the market. To calculate what you might be willing to pay for this bond, you would need to calculate the present value of the bond's future cash flows (the interest payments and the principal at maturity) discounted at the new market interest rate of 9%.