The University of California has two bonds outstanding. Both issues have the same credit rating,...
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The University of California has two bonds outstanding. Both issues have the same credit rating, a face value of $1,000 and a coupon rate of 6%. Coupons are paid twice a year. Bond A matures in 1 year, while bond B matures in 30 years. The market interest rate for similar bonds is 11%.
Attempt 2/5 for 10 pts. Part 1 What is the price of bond A? 934.92 Correct
Part 2 What is the price of bond B? 0+ decimals Attempt 1/5 for 10 pts.
Part 3 Now assume that yields increase to 14%. What is the price of bond A? 0+ decimals.
Part 4 What is the price of bond B now? 0+ decimals
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