An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 7% annual coupon. Bond L matures in 14 years, while Bond S matures in 1 year. Assume that only one more interest...


An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 7% annual coupon. Bond L matures in 14 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 14 more payments are to be made on Bond L.



  1. 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 10%? Round your answer to the nearest cent.
    $



    What will the value of the Bond S be if the going interest rate is 10%? Round your answer to the nearest cent.
    $



    What will the value of the Bond L be if the going interest rate is 12%? Round your answer to the nearest cent.
    $



    What will the value of the Bond S be if the going interest rate is 12%? Round your answer to the nearest cent.
    $



Jun 09, 2022
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