An investor looks at todays yield to maturities in the Wall Street Journal for debt with 10 year maturities. He observes the following:

Rating	AAA	AA	A	BBB	BB
YTM	4.37%	4.60%	4.75%	4.95%	5.15%

Exxon Mobil (XON) has debt that is AAA rated. Suppose an investor wants to value Exxon bonds that will mature in 10-years. He sees one Exxon bond that pays a 8.00% annual coupon with a face value of $1,000.

What should the bond trade for today?

a)

An investor looks at todays yield to maturities in the Wall Street Journal for debt with 10 year maturities. He observes the following:

Rating	AAA	AA	A	BBB	BB
YTM	4.44%	4.60%	4.75%	4.95%	5.15%

Exxon Mobil (XON) has debt that is AAA rated. Suppose an investor wants to value Exxon bonds that will mature in 10-years. He sees one Exxon bond that pays a 7.125% annual coupon with a face value of $1,000.

Bond prices are often quoted as a percentage of $100 face value increments. How would you quote your results from Part A? (express answer as a percentage, xx.xx%, of par)

b)