An investor has two bonds in his portfolio

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Reference no: EM131974232

An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 9% annual coupon. Bond L matures in 17 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 17 more payments are to be made on Bond L.

1. What will the value of the Bond L be if the going interest rate is 6%? Round your answer to the nearest cent. $

2. What will the value of the Bond S be if the going interest rate is 6%? Round your answer to the nearest cent. $

3. What will the value of the Bond L be if the going interest rate is 10%? Round your answer to the nearest cent. $

4. What will the value of the Bond S be if the going interest rate is 10%? Round your answer to the nearest cent. $

5. What will the value of the Bond L be if the going interest rate is 12%? Round your answer to the nearest cent. $

6. What will the value of the Bond S be if the going interest rate is 12%? Round your answer to the nearest cent. $

Reference no: EM131974232

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