eBook Problem Walk-Through An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 16 years, while Bonds matures in 1 year a. What will the value of the Bond L be if the going interest rate is 596, 6%, and 11%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 16 more payments are to be made on Bond L. Round your answers to the nearest cent. 11% Bond L 5% 6% $ Bond s 5 $ 5 b. Why does the longer-term band's price vary more than the price of the shorter-term bond when Interest rates chango? 1. Long-term bonds have greater interest rate risk than do short-term bonds. 11. The change in price due to a change in the required rate of return decreases as a bond's maturity increases, II. Long-term bonds have lower Interest rate risk than do short-term bonds. IV. Long-term bonds have lower reinvestment rate risk than do short-term bonds. V. The change in price due to a change in the required rate of return increases as a bond's maturity decreases. Select