A $1,000 bond has a coupon of 4 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 6 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. S b. What would be the price if comparable debt yields 6 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. s c Why are the prices different in a and b? The price of the bond in a is -Select- v than the price of the bond in b as the principal payment of the bond in a Is Select- 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: % YIM: % Grade it Now Save & Continue Continue without saving Interest Factors for the Present Value of One Dollar 1% 3% 4% 5% 8% 99 374 15% 18% 20% 200287 Time Period (e.g. year) 1 2 3 4 5 781 WN- 2% 1980 961 942 924 906 990 980 971 961 951 610 1971 943 915 889 .863 1962 925 .889 855 1822 952 907 .864 1823 784 943 890 840 792 :747 .935 1873 .816 763 1713 1926 1857 794 735 681 917 1842 .772 708 1650 909 826 1751 .683 .621 .893 1797 2712 636 .567 1.877 .769 .675 592 .519 1870 .756 1658 572 497 .862 -743 641 .552 _476 847 718 2609 516 437 1833 694 579 482 402 806 .650 524 422 341 32 291 6 7 8 9 10 942 933 923 914 905 .888 871 .853 1837 .820 .838 1813 5789 1766 0744 790 760 731 703 .676 746 .711 .677 .645 .614 705 665 .627 592 1558 .666 .623 1582 544 1508 .630 583 1540 1500 1463 596 547 .502 460 422 -564 .513 .467 424 .386 .507 .452 -404 361 322 456 400 351 .308 .270 432 1.376 327 284 .247 410 354 .305 .263 .227 370 314 266 226 .191 335 279 233 194 162 275 222 179 144 2116 227 3178 139 108 3085 11 12 13 14 15 .896 887 879 .870 .861 .804 788 773 758 743 722 701 0681 661 642 650 .625 601 577 1555 .585 .557 530 1505 481 527 497 1469 442 417 475 444 415 388 1:362 429 397 1368 .340 315 388 1356 326 .299 .275 350 .319 .290 .263 .239 .287 .257 .229 .205 .183 .237 .208 .182 .160 .140 .215 .187 .163 .141 123 .195 -168 .145 .125 108 .162 137 .116 .099 .084 1135 112 1.093 078 065 094 076 061 3049 040 066 052 040 2032 025 728 16 17 18 19 20 .853 1844 .836 .828 .820 714 .700 .686 .673 623 605 _587 1570 554 534 513 494 475 456 .458 436 416 396 394 371 350 1331 1312 339 317 1296 .276 1258 .292 270 .250 .232 .252 .231 .212 1.194 178 .218 .198 1.180 .164 1.149 .163 .146 .130 .116 .104 .123 .107 .108 .093 095 081 1083 .070 073 .061 .093 .080 .069 .060 2051 .071 060 .051 .043 037 1,054 .045 .038 1031 026 032 1.026 021 2017 014 019 015 2012 009 007 215 1059 116 .038 024 016 .030 1.092 2010 2005002 25 780 478 .610 1375 1233 .184 -146 295 020 057 2015 1001 033 2012 1.007 002 2004 2075 .099 131 30 1742 552 1,412 1308 .231 1174 Interest Factors for the Present Value of an Annuity of One Dollar Time Period leg. year) AWN 2 3 4 5 1% 2% 3% 6% 33% 100% 12% 16% 18% 20% 2846 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1392 1.332 1.276 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1674 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 8 9 10 a 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2678 2.455 7.652 7.325 7020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 8.566 8.162 7.786 7.435 7108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 12 13 14 15 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3962 3.459 3,061 2.740 13.865 12.849 11.938. 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 17 18 19 20 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 15.562 14.292 13.166 12.166 11 274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 16.398 14.992 13.754 12659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.0973.539 3.109 2.770 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.1775.517 4.979 4.160 3.569 3.124 2.778