An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 17 years, while Bond S matures in 1 year: a. What will the value of the Bond L be if the poing interest rate is 5%,7%, and 11%. Assume that only one more interest payment is to be made on Bond 5 . at its maturity and that 17 more payments are to be made on Bond L Round your answers to the nearest cent. b. Why does the fonger-term bond's price vary more than the price of the shorter-term bond when interest rates change? 1. Long-term bonds have greater interest rate risk than do short-term bonds. 71. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. IIt. Long-term bonds have lower interest rate isk than do short-term bondt. TV. Long-term bonds have lower reitivestment rate fisk than do short term bonds. 4. The change in orice due to a change in the required rate of retum increases as a bond's maturify decreases