Compute bond value for the following: An investor has 2 bonds in his portfolio that...
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Accounting
Compute bond value for the following:
An investor has 2 bonds in his portfolio that have face value of $1,000 and pay a 10% annual coupon. Bond L matures in 15 years; Bond S matures in 1 year.
What would be the value of each bond if the market (discount) rate is 5%?
What would be the value of each bond if the market (discount) rate is 12%?
For answer a, are the bonds sold at a premium or discount?
For answer b, are the bonds sold at a premium or discount?
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