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Your grandfather has asked you to review his investments and you are analyzing his bonds. He owns bonds from Riverview Holding and Hilltop International. Both
Your grandfather has asked you to review his investments and you are analyzing his bonds. He owns bonds from Riverview Holding and Hilltop International. Both bonds pay interest annually and have 15 years left until they mature. Riverview bonds have an 11% coupon and a 9% yield to maturity. Hilltop bonds have a 6% coupon and an 8% yield to maturity. You should calculate the current price and what the price will be in the future as the bonds approach maturity. While your grandfather owns more than one bond of each company, for this problem calculate the price of one $1,000 par value bond. Round your answers to the nearest whole number and no commas. This question is confusing - after 7 years means that many years have gone by, etc. Riverview Bonds What is the current price of a Riverview bond? Assuming the YTM remains at 9%, what will the price of the Riverview bond be after 7 years (so, 8 years remain)? Assuming the YTM remains at 9%, what will the price of the Riverview bond be after 13 years? Hilltop Bonds What is the current price of a Hilltop bond? Assuming the YTM remains at 8%, what will the price of the Hilltop bond be after 7 years? Assuming the YTM remains at 8%, what will the price of the Hilltop bond be after 13 years
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