Discount bond making semiannual payments

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Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 12 percent, has a YTM of 10 percent, and has 16 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 10 percent, has a YTM of 12 percent, and also has 16 years to maturity. The bonds have a $1,000 par value

What is the price of each bond today?

If interest rates remain unchanged, what do you expect the price of these bonds to be one year from now? In six years? In 11 years? In 15 years? In 16 years?

Reference no: EM131303379

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