Question
You are trying to price two bonds that have the same maturity and par value but different coupon rates and different required rates of return.
You are trying to price two bonds that have the same maturity and par value but different coupon rates and different required rates of return. Both bonds mature in 3 years and have par values of $1000. One bond has a coupon rate of 7% and a required rate of return of 7%. The other bond has a coupon rate of 5% and a required rate of return of 5%. What is the absolute value of the difference between the price of these two bonds? $ You should set your calculator for at least four decimal places of accuracy. Place your answer in dollars and cents. Do not include a dollar sign or comma in your answer.
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