Show the cash flows and prices for the following four bonds, each with a par value of $1,000 and paying interest semi-annually: Which of the four bonds is preferred?

3. Show the cash flows and prices for the following four bonds, each with a par value of $1,000 and paying interest semi-annually Coupon Rate 2.8% 3.8% 4.8% 0.0% Market Yield 4.4 4.8 # Years to Maturity A 8 B 7 C 9 D 9 Which of the four bonds would you prefer to hold and why? (Answer in the box provided.) 5.6 5.3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 A Market yield Price 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 B A C B D C E D F G H Place text answer in this box.