Bond Valuation: The company has two bonds in their investment 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 $8\mathrm{.}2\%.$ Bond C pays an $11\mathrm{.}5\%$ annual coupon, while Bond Z is a zero$-$coupon bond.

Assuming that the yield to maturity of each bond remains at $8\mathrm{.}2\%$ over the next $4$ years, calculate the price of the bonds at each of the following years to maturity. Explain any observed differences from the pricing calculations of the two bonds.

Yield to Maturity and Yield to Call: The owner is interested in investing some retained earnings in corporate bonds. She is considering the following:

Bond A has a $7\%$ annual coupon, matures in $12$ years, and has a $$1,000$ face value.

Bond B has a $9\%$ annual coupon, matures in $12$ years, and has a $$1,000$ face value.

Bond C has an $11\%$ annual coupon, matures in $12$ years, and has a $$1,000$ face value.

Each bond has a yield to maturity of $9\%.$

a$.$ Before calculating the prices of the bonds, identify whether each bond is trading at a premium, at a discount, or at par.

b$.$ Calculate the price of each of the three bonds.

c$.$ Calculate the current yield for each of the three bonds.