A $1,000 bond has a coupon of 8 percent and matures after ten years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 9 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 9 percent and the bond matures after five 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 than the price of the bond in b as the principal payment of the bond in a is than the principal payment of the bond in b (in time).
A $1,000 bond has a coupon of 8 percent and matures after ten years. Assume that the bond pays interest annually.
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What would be the
bond's price if comparable debt yields 9 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.$
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What would be the price if comparable debt yields 9 percent and the bond matures after five years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.
$
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Why are the prices different in a and b?
The price of the bond in a is than the price of the bond in b as the principal payment of the bond in a is 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 ten years:
CY: %
YTM: %The bond matures after five years:
CY: %
YTM: %
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