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Only the price for Bond X and Bond Y in the first part is correct. Can you please help me solve the second part? Bond
Only the price for Bond X and Bond Y in the first part is correct. Can you please help me solve the second part?
Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 12 percent, has a YTM of 10 percent, and has 18 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 10 percent, has a YTM of 12 percent, and also has 18 years to maturity. The bonds have a 1,000 par value. What is the price of each bond today? Price of Bond 1165.47 Price of Bond Y 855.01 If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In ten years? In fifteen years? In 15 years? In 18 years? Price of bond Bond X Bond Y One year 1,018.56 981.67 Ten years 1,124.62 885.30 Fifteen years 1,153.72 862.35 15 years 1,153.72 862.35 18 years 1,165. 853.79Step by Step Solution
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