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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 8.1%. 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 8.1% 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 $ $ 3 $ $ 2 $ $ 1 $ $ 0 $ $
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