Determining the today price of bond

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Bond X is a premium bond making semiannual payments. The bond pays 8 percent coupon, has a yield to maturity (YTM) of 6 percent and has 14 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 9 percent coupon, has a YTM of 11 percent and also has 17 years to maturity.

a) What is the price of each bond today?

b) If interest rate remains unchanged what do you expect the price of these bonds to be one year from now? Price of these bonds in eight years from now? Price of these bonds in twelve years from now?

Reference no: EM133069633

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