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Assume you have a one year investment honzon and are trying to choose anong three bonds. Al have the same degree of default tisk and
Assume you have a one year investment honzon and are trying to choose anong three bonds. Al have the same degree of default tisk and mature in 10 years. The first is a zero coupon bond that pays $1.000 at maturity. The second has a coupon rate and pays the $75 coupon once per year. The third has a 9 Scoupon rate and pays the $95 coupon once per year. Assume that tonds are compounded annually a. If all three bonds are now priced to yield 75% to maturity, what are their prices? (Do not round intermediate calculations, Round your answers to 2 decimal places.) Zero 75% Coupon 9. Coupon Current prices b. If you expect thelyields to maturity to be at the bearing of next year what will the orice tieten (Do not round intermediate calculations. Round your answers to 2 decimal places. Zero 7.5% Coupon 9.6% Coupon Pin your om
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