An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 12% 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 going interest rate is 6%, 8%, and 13%? Assume that only one more interest payment is to be made on Bond S at its matu and that 17 more payments are to be made on Bond L Round your answers to the nearest cont. 6% 8% 139 Bond $ $ $ Bonds $ $ $ b. Why does the longer term bond's price vary more than the price of the shorter-term bond when interest rates change? 1. Long-term bonds have lower interest rate risk than do short term bonds 11. Long-term bonds have lower reinvestment rate risk than a short-term bonds III. The change in price due to a change in the required rate of return increases as a bond's maturity decreases IV. Long-term bonds have greater interest rate risk than do short-term bonds V. The change in price due to a change in the required rate of retum decres a bond maturity increases