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 8.8%. Bond C pays a 12.5% annual coupon, while Bond Z is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 8.8% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z

b. Select the correct graph based on the time path of prices for each bond. A Bond Price $1.2004 Bond C $1,000 $800 $600 Bond Z $400 $200 3 Bond Price $1.200 $1.000 $800 $600 $400 $200 Bond Price $1.200 $1.000 $800 $600. $400 $200 Bond Price $1.200 $1.000 $800 $600 $400 $200 14 1 Years to Maturity B Bond Z Bond C 3 1 Years to Maturity Bond Z Bond C 3 1 Years to Maturity D Bond C Bond Z 3 1 0 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 8.8%. Bond C pays a 12.5% annual coupon, while Bond Z is a zero coupon bond. a. Assuming that the yield to maturity of each bond remains at 8.8% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z 4 $ 2 1 0 b. Select the correct graph based on the time path of prices for each bond. LA LA tA LA