Click here to read the eBook: Bond valuation BOND VALUATION An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 9% annual coupon. Bond L matures in 20 years, while Bonds 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 20 more payments are to be made on Bond L. a. What will the value of the Bond L be if the going interest rate is 5%? Round your answer to the nearest cent. 8 What will the value of the Bond S be if the going interest rate is 5%? Round your answer to the nearest cent. 3 What will the value of the Bond L be if the going interest rate is 9%? Round your answer to the nearest cent. What will the value of the Bond S be if the going interest rate is 9%? Round your answer to the nearest cent. 3 What will the value of the Bond L be if the going interest rate is 11%? Round your answer to the nearest cent. What will the value of the Bond S be if the golng interest rate is 11%? Round your answer to the nearest cent. 981.98 b. Why does the longed-term bond's price vary more than the price of the shorter-term bond when Interest rates change? 1. Long-term bonds have lower interest rate risk than do short-term bonds. II. Long-term bonds have lower reinvestment rate risk than do short-term bonds. 111. The change in price due to a change in the required rate of return increases as a bond's maturity decreases IV. Long-term bonds have greater interest rate risk than do short-term bonds. V. The change in price due to a change in the required rate of return decreases as a bond's maturity increases