Intro The University of Calfornia has two bonds outstanding. Both issues have the same credit rating, a face value of $1,000 and a coupon rate of 6%. Coupons are paid twice a year, Bond A matures in 1 yeer, while bond B matures in 30 years. The market interest rate for similar bonds is 8%. Part 1 Attempt 1/5 for 10 pts. What is the price of bond A ? Correct d We need to calculate the present values of 2 cash flows even though the bond has only 1 year to matunty, since bonds typically pay interest semi-annually. As a result, we also have to adjust the cdiscount rate to half the given market interest rate and find the coupon payment as 1/2$1,000 coupon rate. PA=1+0.0430+(1+0.04)21,030=981.144 Using a financial calculator: Now assume that yields increase to 11%. What is the price of bond A ? Part 4 - 8 - Attempt 1/5 for What is the price of bond B now