Ch $07-$End$-$of$-$Chapter Problems $-$ Bonds and Their Valuation

An investor has two bonds in her portfolio, Bond $C$ and Bond $Z.$ Each bond matures in $4$ years, has a face value of $$1,000,$ and has a yield to ma $9\mathrm{.}3\%.$ Bond $C$ pays a $10\mathrm{.}5\%$ annual coupon, while Bond $Z$ is a zero coupon bond.

a$.$ Assuming that the yield to maturity of each bond remains at $9\mathrm{.}3\%$ over the next $4$ years, calculate the price of the bonds at each of th following years to maturity. Round your answers to the nearest cent.

Years to Maturity Price of Bond C Price of Bond Z

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