What will be the value of each of these bonds

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Reference no: EM13295827

The desreumaux Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year. interest is paid annually

a. what will be the value of each of these bonds when the going rate of interest is 5%, 7% and 11%? Assume there is only one more interest payment to be made on bond S

b. why does the longer term 15 year bond fluctuate more when interest rates change thand does the shorter 1 year bond

Reference no: EM13295827

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