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Bond X is a premium bond making semi-annual payments. The bond pays a 9 percent coupon, has a YTM of 7 percent, and has 13
| Bond X is a premium bond making semi-annual 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 dolar price of each bond today? 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? | ||||||
| Bond X | ||||||
| Coupon Rate | ||||||
| YTM | ||||||
| Settlement Date | ||||||
| Maturity Date | ||||||
| Maturity Date | ||||||
| Maturity Date | ||||||
| Maturity Date | ||||||
| Maturity Date | ||||||
| Redemption (% of par) | ||||||
| # of coupons per year | ||||||
| Bond Y: | ||||||
| Coupon Rate | ||||||
| YTM | ||||||
| Complete the following analysis. Do not hard code values in your answers. | ||||||
| Price of Bond X | ||||||
| Maturity (Years) | ||||||
| 13 | ||||||
| 12 | ||||||
| 11 | ||||||
| 10 | ||||||
| 5 | ||||||
| 1 | ||||||
| Price of Bond Y | ||||||
| Maturity (Years) | ||||||
| 13 | ||||||
| 12 | ||||||
| 11 | ||||||
| 10 | ||||||
| 5 | ||||||
| 1 | ||||||
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Personal Finance
Authors: Jeff Madura
5th edition
132994348, 978-0132994347
