Question
Bond X is a premium bond making semiannual payments. The bond pays a 12 percent coupon, has a YTM of 10 percent, and has 12
Bond X is a premium bond making semiannual payments. The bond pays a 12 percent coupon, has a YTM of 10 percent, and has 12 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 10 percent coupon, has a YTM of 12 percent, and also has 12 years to maturity. |
What is the price of each bond today?
Price of bond X Price on 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 10 years? In 12 years? (Round your answers to 2 decimal places. (e.g., 32.16)) |
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