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Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 8.3 percent, a YTM of 6.3 percent, and
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 8.3 percent, a YTM of 6.3 percent, and has 16 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 6.3 percent, a YTM of 8.3 percent, and also has 16 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000. a. What are the prices of these bonds today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What do you expect the prices of these bonds to be in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What do you expect the prices of these bonds to be in three years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. d. What do you expect the prices of these bonds to be in eight years? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16. e. What do you expect the prices of these bonds to be in 12 years? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. f. What do you expect the prices of these bonds to be in 16 years? Note: Do not round intermediate calculations.
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