Using semiannualcompounding, find the prices of the followingbonds:

a. A 10.9%, 15-year bond priced to yield 9.7%.

b. A 7.7%, 10-year bond priced to yield 8.9%.

c. A 12.4%, 20-year bond priced at 11.2%.

Repeat the problem using annual compounding. Then comment on the differences you found in the prices of the bonds.

a1. Using semiannualcompounding, the price of the bond is $. (Round to the nearestcent.)

b1. Using semiannualcompounding, the price of the bond is $. (Round to the nearestcent.)

c1. Using semiannualcompounding, the price of the bond is $. (Round to the nearestcent.)

a2. Using annualcompounding, the price of the bond is $. (Round to the nearestcent.)

b2. Using annualcompounding, the price of the bond is $ (Round to the nearestcent.)

c2. Using annualcompounding, the price of the bond is $ (Round to the nearestcent.)

Comment on the differences you found in the prices of the bonds.(Select the best answerbelow.)

Bonds selling at a premium sell at higher prices when the interest is compounded semiannually as opposed to annually.Accordingly, bonds selling at a discount sell at higher prices when the interest is compounded annually as opposed to semiannually.

Or

Bonds selling at a premium sell at lower prices when the interest is compounded semiannually as opposed to annually.Accordingly, bonds selling at a discount sell at lower prices when the interest is compounded annually as opposed to semiannually.