Portfolio that both have face value and annual coupon

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Reference no: EM131572088

An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 15 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 15 more payments are to be made on Bond L.

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

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

What will the value of the Bond L be if the going interest rate is 9%? Round your answer to the nearest cent.

What will the value of the Bond S be if the going interest rate is 9%? Round your answer to the nearest cent.

What will the value of the Bond L be if the going interest rate is 14%? Round your answer to the nearest cent.

What will the value of the Bond S be if the going interest rate is 14%? Round your answer to the nearest cent.

Reference no: EM131572088

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