Question
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 9.2%. Bond C pays a 12% annual coupon, while Bond Z is a zero coupon bond.
Assuming that the yield to maturity of each bond remains at 9.2% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answer to the nearest cent.
| Years to Maturity | Price of Bond C | Price of Bond Z |
| 4 | $ | $ |
| 3 | ||
| 2 | ||
| 1 | ||
| 0 |
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes
11th edition
9781259278617, 77861647, 1259278611, 978-0077861643
