An investor has two bonds in his portfolio that have a facevalue of $1,000 and pay a 7% annual coupon. Bond L matures in 17years, while Bond S matures in 1 year.
Assume that only one more interest payment is to be made on BondS at its maturity and that 17 more payments are to be made on BondL.
- What will the value of the Bond L be if the going interest rateis 5%? Round your answer to the nearest cent.
$
What will the value of the Bond S be if the going interest rate is5%? Round your answer to the nearest cent.
$
What will the value of the Bond L be if the going interest rate is10%? Round your answer to the nearest cent.
$
What will the value of the Bond S be if the going interest rate is10%? Round your answer to the nearest cent.
$
What will the value of the Bond L be if the going interest rate is11%? Round your answer to the nearest cent.
$
What will the value of the Bond S be if the going interest rate is11%? Round your answer to the nearest cent.
