A $1,000 bond has a coupon of 7 percent and matures after eight years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 10 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ What would be the price if comparable debt yields 10 percent and the bond matures after four years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ Why are the prices different in a and b? The price of the bond in a is -Select- than the price of the bond in b as the principal payment of the bond in a is -Select- than the principal payment of the bond in b (in time). What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after eight years: CY: % YTM: % The bond matures after four years: CY: % YTM: %
Problem 13-01
A $1,000 bond has a coupon of 7 percent and matures after eight years. Assume that the bond pays interest annually.
What would be the
$
What would be the price if comparable debt yields 10 percent and the bond matures after four years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.
$
Why are the prices different in a and b?
The price of the bond in a is
-Select-
than the price of the bond in b as the principal payment of the bond in a is
-Select-
than the principal payment of the bond in b (in time).
What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places.
The bond matures after eight years:
CY:
%
YTM:
%
The bond matures after four years:
CY:
%
YTM:
%
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