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There are two bonds available for issuance: bond GREEN, and bond ECO. Each bond matures in 3 years, has a face value of $1,500, and
There are two bonds available for issuance: bond GREEN, and bond ECO. Each bond matures in 3 years, has a face value of $1,500, and has YTM of 9.6%. Bond GREEN pays 4% annual coupon, while bond ECO has a 2% annual coupon. Assume the YTM of each bond remains at 9.6% over the next 3 years, complete the chart below: Years to Maturity Price of GREEN Price of ECO 3 ___________ ____________ 2 ___________ ____________ 1 ___________ ____________ 0 ___________ ____________
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