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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
An investor has two bonds in her portfolio, Bond C and Bond Z Each bond matures in years, has a face value of $ and has a yield to maturity of Bond C pays a annual coupon, while Bond Z is a zero coupon bond.
Assuming that the yield to maturity of each bond remains at over the next 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
$
$
$
$
$
$
$
$
$
$
Select the correct graph based on the time path of prices for each bond.
The correct sketch is
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