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 11% annual coupon. Bond L matures in 11 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 11 more payments are to be made an Bond L a. What will the value of the Bond L be if the going interest rate is 4%? Round your answer to the nearest cent. What will the value of the Bond S be if the going interest rate is 447 Round your answer to the nearest cent. What will the value of the Bond L be if the going interest rate is 1047 Round your answer to the nearest cent. What will the value of the Bond S be if the going interest rate is 10%? Round your answer to the nearest cent. What will the value of the Bond L be if the going interest rate is 1297 Round your answer to the nearest cent. What will the value of the Bond S be if the going interest rate is 12%? Round your answer to the nearest cont. 1187 28,155 0 () W X MacBook % 5 & 7 6 8 = 7 T Y U 0 P What will the value of the Bond S be if the going interest rate is 12%7 Round your answer to the nearest cent. b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? 1. Long-term bonds have lower reinvestment rate risk than do short-term bonds. 11. The change in price due to a change in the required rate of return increases as a bond's maturity decreases III. Long-term bonds have greater interest rate risk than do short-term bonds. IV. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. V. Long-term bonds have lower interest rate risk than do short-term bonds. -Select- 1187 28,156 W O MacBook 15 FT $ A % 5 & 7 6 8 9 0 R T Y P F JE H K L V B N M