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Question 30 Assume you have a 1-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk

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Question 30 Assume you have a 1-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 10 years. The first is a zero-coupon bond that pays $1,000 at maturity. The second has an 8% coupon rate and pays the $80 coupon once per year. The third has a 10% coupon rate and pays the $100 coupon once per year. Round your answers to 2 decimals - include all training zeros, use 000's separators (commas) where appropriate, do not enter dollar or percent signs (no $ or %) a. If all three bonds are now priced to yield 8% to maturity, what are the prices of (i) the zero-coupon bond; (ii) the 8% coupon bond; (iii) the 10% coupon bond? Price at to Zero Coupon $ Price at t 8% Coupon $ Zero Coupon $ b. If you expect their yields to maturity to be 8% at the beginning of next year, what will be the price of each bond? 5 pts 10% Coupon $ 8% Coupon 10% Coupon $ c. If your tax bracket is 30% on ordinary income and 20% on capital gains income, what will be the after-tax rate of return on each bond? Zero Coupon After Tax Return % 8% Coupon % 10% Coupon de %

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