Investments

3. Using semiannual compounding, find the prices of the following bonds.

a. A 10.5%, 15-year bond priced to yield 8%

b. A 7%, 10-year bond priced to yield 8%

c. A 12%, 20-year bond priced at 10%

Repeat the problem using annual compounding. Then comment on the differences you found in the prices of the bonds.