An investor has two bonds in his portfolio that have a face value of $1,000 and...

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Finance

An investor has two bonds in his portfolio that have a facevalue of $1,000 and pay a 8% annual coupon. Bond L matures in 10years, 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 10 more payments are to be made on BondL.
What will the value of the Bond L be if the going interest rateis 6%? Round your answer to the nearest cent.
$

What will the value of the Bond S be if the going interest rate is6%? Round your answer to the nearest cent.
$

What will the value of the Bond L be if the going interest rate is8%? Round your answer to the nearest cent.
$

What will the value of the Bond S be if the going interest rate is8%? Round your answer to the nearest cent.
$

What will the value of the Bond L be if the going interest rate is14%? Round your answer to the nearest cent.
$

What will the value of the Bond S be if the going interest rate is14%? Round your answer to the nearest cent.
$

Answer & Explanation Solved by verified expert

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Bond S K N Bond Price Annual Coupon1 YTMk Par value1 YTMN k1 K 1 Bond Price 810001001 6100k 10001 61001 k1 Bond Price 101887 Bond L K N Bond Price See Answer

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An investor has two bonds in his portfolio that have a facevalue of $1,000 and pay a 8% annual coupon. Bond L matures in 10years, while Bond S matures in 1 year.Assume that only one more interest payment is to be made on BondS at its maturity and that 10 more payments are to be made on BondL.What will the value of the Bond L be if the going interest rateis 6%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is6%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is8%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is8%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is14%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is14%? Round your answer to the nearest cent.$