Question
Bond X is a premium bond making semiannual payments. The bond pays a 9 percent coupon, has a YTM of 7 percent, and has 13
Bond X is a premium bond making semiannual payments. The bond pays a 9 percent coupon, has a YTM of 7 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 7 percent coupon, has a YTM of 9 percent, and also has 13 years to maturity. |
What is the price of each bond today? (Round your answers to 2 decimal places. (e.g., 32.16)) |
Price of bond X | $ |
Price of bond Y | $ |
If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In three years? In eight years? In 12 years? In 13 years? (Round your answers to 2 decimal places. (e.g., 32.16)) |
Price of bond | Bond X | Bond Y |
One year | $ | $ |
Three years | $ | $ |
Eight years | $ | $ |
12 years | $ | $ |
13 years | $ | $ |
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