Bond X is a premium bond making annual payments. The bond pays an 8.1 percent co
ID: 2684084 • Letter: B
Question
Bond X is a premium bond making annual payments. The bond pays an 8.1 percent coupon, has a YTM of 6.1 percent, and has 14 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 6.1 percent coupon, has a YTM of 8.1 percent, and also has 14 years to maturity. Assume the interest rates remain unchanged.What do you expect the prices of EACH of these bonds to be in 1 year for bond X and bond Y?
What do you expect the prices of EACH of these bonds to be in 3 years for bond X and bond Y?
What do you expect the prices of EACH of these bonds to be in 8 years for bond X and bond Y?
What do you expect the prices of EACH of these bonds to be in 12 years for bond X and bond Y??
What do you expect the prices of EACH of these bonds to be in 14 years for bond X and bond Y??
***If you could please show me the steps you are tacking I would greatly appreciate it!
Explanation / Answer
= What are the prices of these bonds today? (Do not include the dollar signs ($). Round your answers to 2 decimal places (e.g., 32.16).
Bond X Bond Y
Prices $ 1,184.75 $ 836.07
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= What do you expect the prices of these bonds to be in one year? (Do not include the dollar signs ($). Round your answers to 2 decimal places (e.g., 32.16).)
Bond X Bond Y
Prices $ 1,176.02 $ 842.79
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= What do you expect the prices of these bonds to be in three years? (Do not include the dollar signs ($). Round your answers to 2 decimal places (e.g., 32.16).)
Bond X Bond Y
Prices $ 1,156.93 $ 857.91
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= What do you expect the prices of these bonds to be in eight years? (Do not include the dollar signs ($). Round your answers to 2 decimal places (e.g., 32.16).)
Bond X Bond Y
Prices $ 1,098.04 $ 907.82
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Requirement 5: What do you expect the prices of these bonds to be in 12 years? (Do not include the dollar signs ($). Round answers your to 2 decimal places (e.g., 32.16).)
Bond X Bond Y
Prices $ 1,036.62 $ 964.38
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= What do you expect the prices of these bonds to be in 14 years? (Do not include the dollar signs ($).)
Bond X Prices $ 1,000 Bond Y $ 1,000 Bond X is a premium bond making annual payments.
The bond pays an 8.1 percent coupon, has a YTM of 6.1 percent, and has 14 years to maturity.