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BOND VALUATION An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value
BOND VALUATION 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%. Bond C pays a 11.5% annual coupon, while Bond Z is a zero coupon bond. each bond remains at 8% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your a. Assuming that the yield to maturity o answer to the nearest cent. Price of Bond C Years to Maturity Price of Bond Z 1 prices for each bond b. Select the correct graph based on the time path b. Select the correct graph based on the time path of prices for each bond. A Bond Price $1.200 Bond C $1.000 $800 Bond Z $600 $4 00 $200 Years to Maturity B Bond Price $1.200 Bond Z $1.000 $800 Bond C $600 $400 $200 2 Years to Maturity C Bond Price $1.200 Bond Z $1,000 $800 Bond C $600 $400 $200 Years to Maturity D Bond Price $1.200 Bond C $1.000 $800 Bond Z $600 $400 $200 Years to Maturity The correct sketch is -Select
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