Question
Bond X is a premium bond making annual payments. The bond has a coupon rate of 8.6 percent, a YTM of 6.6 percent, and has
Bond X is a premium bond making annual payments. The bond has a coupon rate of 8.6 percent, a YTM of 6.6 percent, and has 19 years to maturity. Bond Y is a discount bond making annual payments. This bond has a coupon rate of 6.6 percent, a YTM of 8.6 percent, and also has 19 years to maturity. Assume the interest rates remain unchanged. |
Requirement 1: |
What are the prices of these bonds today? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
Prices | |
Bond X | $ |
Bond Y | $ |
Requirement 2: |
What do you expect the prices of these bonds to be in one year? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g.,32.16).) |
Prices | |
Bond X | $ |
Bond Y | $ |
Requirement 3: |
What do you expect the prices of these bonds to be in three years? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g.,32.16).) |
Prices | |
Bond X | $ |
Bond Y | $ |
Requirement 4: |
What do you expect the prices of these bonds to be in eight years? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g.,32.16).) |
Prices | |
Bond X | $ |
Bond Y | $ |
Requirement 5: |
What do you expect the prices of these bonds to be in 12 years? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
Prices | |
Bond X | $ |
Bond Y | $ |
Requirement 6: |
What do you expect the prices of these bonds to be in 19 years? (Do not round intermediate calculations.) |
Prices | |
Bond X | $ |
Bond Y | $ |
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