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

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An investor has two bonds in his portfolio that have a facevalue of $1,000 and pay a 12% annual coupon. Bond L matures in 20years, while Bond S matures in 1 year.
What will the value of the Bond L be if the going interest rateis 7%, 8%, and 13%? Assume that only one more interest payment isto be made on Bond S at its maturity and that 20 more payments areto be made on Bond L. Round your answers to the nearest cent.
7% 8% 13%
Bond L $ $ $
Bond S $ $ $
Why does the longer-term bond’s price vary more than the priceof the shorter-term bond when interest rates change?
Long-term bonds have lower interest rate risk than doshort-term bonds.
Long-term bonds have lower reinvestment rate risk than doshort-term bonds.
The change in price due to a change in the required rate ofreturn increases as a bond's maturity decreases.
Long-term bonds have greater interest rate risk than doshort-term bonds.
The change in price due to a change in the required rate ofreturn decreases as a bond's maturity increases.

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An investor has two bonds in his portfolio that have a facevalue of $1,000 and pay a 12% annual coupon. Bond L matures in 20years, while Bond S matures in 1 year.What will the value of the Bond L be if the going interest rateis 7%, 8%, and 13%? Assume that only one more interest payment isto be made on Bond S at its maturity and that 20 more payments areto be made on Bond L. Round your answers to the nearest cent.7%8%13%Bond L$ $ $ Bond S$ $ $ Why does the longer-term bond’s price vary more than the priceof the shorter-term bond when interest rates change?Long-term bonds have lower interest rate risk than doshort-term bonds.Long-term bonds have lower reinvestment rate risk than doshort-term bonds.The change in price due to a change in the required rate ofreturn increases as a bond's maturity decreases.Long-term bonds have greater interest rate risk than doshort-term bonds.The change in price due to a change in the required rate ofreturn decreases as a bond's maturity increases.