Problem 7-5 Bond valuation An investor has two bonds in his portfolio that both have a face value of$1,000 and pay a 7% annual coupon. Bond L matures in 14 years, while Bond S matures in 1 year Assume that only one more interest payment is to be made on Bond S at its maturity and that 14 more payments are to be made on Bond L a. what will the value of the Bond L be if the going interest rate is 5%? Round your answer to the nearest cent. What will the value of the Bond 5 be if the going interest rate is 5%? Round your answer to the nearest cent. What will the value of the Bond L be if the going interest rate is 10%? Round your answer to the nearest cent. What will the value of the Bond S be if the going interest rate is 10%? Round your answer to the nearest cent. what will the value of the Bond L be lf the going interest rate is 13%? Round your answer to the nearest cent. what will the value of the Bond S be if the going interest rate is 13%? Round your answer to the nearest cent. b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? . Long-term bonds have greater interest rate risk then do short-term bonds. LI. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. III. Long-term bonds ave lower interest rate risk then do short-tem bonds. IV. Long-term bonds have lower reinvestment rate risk then do short term bonds. V. The change in price due to a change in the required rate of return increases as a bond's maturity decreases