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$1,000 bond has a coupon of 6 percent and matures after ten years. Assume that the bond pays interest annually. a. What would be the

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$1,000 bond has a coupon of 6 percent and matures after ten years. Assume that the bond pays interest annually. a. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ b. What would be the price if comparable debt yields 8 percent and the bond matures after five years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ c. Why are the prices different in a and b ? The price of the bond in a is than the price of the bond in b as the principal payment of the bond in is than the principal payment of the bond in b (in time). d. What are the current yields and the yields to maturity in a and b ? Round your answers to two decimal places. The bond matures after ten years: CY:YTM:%% The bond matures after five years: CY:YTM:%%

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