Bond Valuation and Interest Rate Risk The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond 5 has a maturity of 1 year. a. 1. What will be the value of each of these bonds when the going rate of interest is 5% ? Assume that there is only one more interest payment to be made on Bond S. Do not round intermediate calculations. Round your answers to the nearest cent. Bond L: 5 Bond 5:$ 2. What will be the value of each of these bonds when the going rate of interest is 9% ? Assume that there is only one more interest payment to be made on Bond S. Do not round intermediate calculations. Round your answers to the nearest cent. Bond L5 Bond 5 : 5 3. What will be the value of each of these bonds when the going rate of interest is 11% ? Assume that there is only one more interest payment to be made on Bond S. Do not round intermediate calculations. Round your answers to the nearest cent. Bond Lis Bond 5:5 b. Why does the longer-term ( 15 -year) bond fluctuate more when interest rates change than does the shorter-term bond ( 1 year)? 1. Longer-term bonds have less interest rate risk than shorter-term bonds. II. Longer-term bonds have less reinvestment rate risk than shorter-term bonds. III. Longer-term bonds have more interest rate risk than shorter-term bonds