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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 4 years, has a face value of $1,000, and has a yield to maturity of 8.8%. Bond
C pays a 10.5% 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 Zb. Select the correct graph based on the time path of prices for each bond.
A
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