A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 10 percent? Use Appendix B...

A $1,000 bond has a coupon of 8 percent and matures after eight years. Assume that the bond pays interest annually.

1. 
   

   What would be the bond's price if comparable debt yields 10 percent? Use Appendix B andAppendix D to answer the question. Round your answer to the nearest dollar.

   
   

   $

   
   


2. 
   

   What would be the price if comparable debt yields 10 percent and the bond matures after four years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

   
   

   $

   
   


3. 
   

   Why are the prices different in
   a
   and
   b?
   The price of the bond in
   a
   is -Select-lessgreaterItem 3 than the price of the bond in
   b
   as the principal payment of the bond in
   a
   is -Select-further outcloserItem 4 than the principal payment of the bond in
   b
   (in time).

   
   


4. 
   

   What are the current yields and the yields to maturity in
   a
   and
   b? Round your answers to two decimal places.

   
   

   The bond matures after eight years:

   
   

   CY:  %
   YTM:  %

   
   

   The bond matures after four years:

   
   

   CY:  %
   YTM:  %