GA Foundations of Finance 01/02/21 1:15 PM Homework: Homework IV Save HW Score: 33.33%, 2 of 6 pts Score: 0 of 1 pt 5 of 6 (2 complete) Instructor-created question Moonlight, Inc. has issued two types of bonds. A1 and A2 . Both of them is paying annual interst of $80. Maturity of A1 is 12 years. Maturity of A2 is 1 year a. Find the value A1 and 2 when the market interest rate is (1) 4 percent (2) 9 percent, and (3) 14 percent? Assume that there is only one more interest payment to be made on the 12 bonds b. Why does the (12-year) bond fluctuate more when interest rates change than does the (1-year) bond? a. When market rate is 1 percent, the value of A1 bonds would be $. (Round to the nearest cent.) When market rate is 9 percent, the value of A1 bonds would be $ (Round to the nearest cent) When the market rate is 14 percent, the value of A1 bonds would be s (Round to the nearest cent.) When the market rate is 1 percent the value of Series A2 bonds would be ${Round to the nearest cent.) When the market rate is 9 percent, the value of Series 2 bonds would be $(Round to the nearest cent) When the market rate is 14 percent, the value of Series A2 bonds would be $. (Round to the nearest cent.) b. Why does the 12-year) bond fluctuate more when interest rates change than does the (1-year) bond? (Select the best choice below) O A. Because longer-term bondholders are locked into a particular interest rate for a longer period of time but are not exposed to any interest rate risk OB. Because longer term bondholders are locked into a particular interest rate for a longer period of time and are therefore exposed to more interest rate risk O C. Because longer-term bondholders are locked into a particular interest rate for a longer penod of time but are exposed to same interest rate risk as short-term bondholders OD. Because longer-terin bondholders are locked into a particular interest rate for a longer period of time and are therefore exposed to less interest rate risk. Click to select your answer(s) and then click Check Answer. ? All parts showing Clear All Check Answer 13:14 2.01.2021