Question
Bond X is a premium bond making annual payments. The bond has a coupon rate of 9.4 percent, a YTM of 7.4 percent, and has
| Bond X is a premium bond making annual payments. The bond has a coupon rate of 9.4 percent, a YTM of 7.4 percent, and has 19 years to maturity. Bond Y is a discount bond making annual payments. This bond has a coupon rate of 7.4 percent, a YTM of 9.4 percent, and also has 19 years to maturity. Assume the interest rates remain unchanged. |
| What are the prices of these bonds today? |
| Prices | ||||
| Bond X | $ | |||
| Bond Y | $ | |||
| What do you expect the prices of these bonds to be in one year? |
| Prices | ||||
| Bond X | $ | |||
| Bond Y | $ | |||
| What do you expect the prices of these bonds to be in three years? |
| Prices | |||||
| Bond X | $ | ||||
| Bond Y | $ | ||||
| |||||
| Prices | |||||
| Bond X | $ | ||||
| Bond Y | $ | ||||
| |||||
| Prices | ||||
| Bond X | $ | |||
| Bond Y | $ | |||
| What do you expect the prices of these bonds to be in 19 years? |
| Prices | ||||
| Bond X | $ | |||
| Bond Y | $ | |||
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Principles Of Financial Management
Authors: Haim Levy, Marshall Sarnat
1st Edition
0137097751, 978-0137097753
