1. Ms. Peabodys portfolio contained issues of long-term bonds maturing in 2031 and 2033 and intermediate-term notes maturing in 2013. Following the assumptions that Sandra made on these debt securities, estimate the values of the semiannual coupon bonds and notes held in Ms. Peabodys portfolio. The coupon rates are 6.75% for the 8-year notes, 9.25% for 26-year bonds and 7.75% for the 28-year bonds. The par value is $1000 for all three debt securities. The required returns are 8.5% and 9% for similar intermediate term and long term bonds respectively. Are the bonds and notes selling at a discount or a premium? (Hint: Section 5-5 in the textbook or the attached PowerPoint file.)