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An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000,
An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.6%. Bond C pays a 10% annual coupon, while Bond Z is a zero coupon bond a. Assuming that the yield to maturity of each bond remains at 8.6% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answer to the nearest cent Years to Maturity Price of Bond C Price of Bond Z 4 b. Select the correct graph based on the time path of prices for each bond Bond Price $1200 $1.000 5800 $600 400 $200 Bond Z Bond C Years to Maturity
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