An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 16 years, while Bond S matures in 1 year. What will the value of the Bond L be if the going interest rate is 6%, 7%, and 12%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 16 more payments are to be made on Bond L. Round your answers to the nearest cent.
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An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 16 years, while Bond S matures in 1 year.
- What will the value of the Bond L be if the going interest rate is 6%, 7%, and 12%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 16 more payments are to be made on Bond L. Round your answers to the nearest cent.
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- An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 17 years, while Bond S matures in 1 year. a. What will the value of the Bond L be if the going interest rate is 7%, 8%, and 12%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 17 more payments are to be made on Bond L. Round your answers to the nearest cent. 7% 12% 8% $ Bond L $ Bond S $ $ b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? 1. Long-term bonds have lower interest rate risk than do short-term bonds. II. Long-term bonds have lower reinvestment rate risk than do short-term bonds. III. The change in price due to a change in the required rate of return increases as a bond's maturity decreases. IV. Long-term bonds have greater interest rate risk than do short-term bonds. V. The change in price due to a change in the required rate of return…Madsen Motors's bonds have 25 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10%, and the yield to maturity is 12%. What is the bond's current market price? Round your answer to the nearest cent.An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 12% annual coupon. Bond L matures in 15 years, while Bond S matures in 1 year. a. What will the value of the Bond L be if the going interest rate is 6%, 8%, and 13% ? Assume that only one more interest payment is to be made on Bond S at its maturity and that 15 more payments are to be made on Bond L. Round your answers to the nearest cent. 6% Bond L $ Bond S $ $ $ -Select- 8% $ $ 13% b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? I. Long-term bonds have lower reinvestment rate risk than do short-term bonds. II. The change in price due to a change in the required rate of return increases as a bond's maturity decreases. III. Long-term bonds have greater interest rate risk than do short-term bonds. IV. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. V. Long-term bonds have…
- An investor has two bonds in his portfolio that have a face value of$1,000 and pay an 11% annual coupon. Bond L matures in 12 years, while Bond S maturesin 1 year.a. What will the value of each bond be if the going interest rate is 6%, 8%, and 12%?Assume that only one more interest payment is to be made on Bond S at its maturityand that 12 more payments are to be made on Bond L.b. Why does the longer-term bond’s price vary more than the price of the shorter-termbond when interest rates change?An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 10 years, while Bond S matures in 1 year. What will the value of the Bond L be if the going interest rate is 6%, 7%, and 12%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 10 more payments are to be made on Bond L. Round your answers to the nearest cent. 6% 7% 12% Bond L $ $ $ Bond S $ $ $ Why does the longer-term bond’s price vary more than the price of the shorter-term bond when interest rates change? Long-term bonds have lower reinvestment rate risk than do short-term bonds. The change in price due to a change in the required rate of return increases as a bond's maturity decreases. Long-term bonds have greater interest rate risk than do short-term bonds. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. Long-term bonds have…An investor has two bonds in his portfollo that have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 16 years, while Bond S matures in 1 year. a. What will the value of the Bond L be if the going interest rate is 7%, 8%, and 11%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 16 more payments are to be made on Bond L. Round your answers to the nearest cent. Bond L Bond S 7% 8% -Select- 11% $ b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when Interest rates change? I. Long-term bonds have greater Interest rate risk than do short-term bonds. II. The change in price due to a change in the required rate of return decreases as a bond's maturity Increases. III. Long-term bonds have lower interest rate risk than do short-term bonds. IV. Long-term bonds have lower reinvestment rate risk than do short-term bonds. V. The change in price due to a change in the required rate of return…
- An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond Y matures in 19 years, while Bond A matures in 1 year. 1. What will the value of the Bond Ybe if the going interest rate is 7%, 8%, and 12%? Assume that only one more interest payment is to be made on Bond A at its maturity and that 19 more payments are to be made on Bond Y. Round your answers to the nearest cent.An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 17 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 17 more payments are to be made on Bond L. What will the value of the Bond S be if the going interest rate is 14%? Round your answer to the nearest cent.An investor has two bonds in his portfolio that have a face value of $1,000 and pay an 11% annual coupon. Bond L matures in 17 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 17 more payments are to be made on Bond L. What will the value of the Bond L be if the going interest rate is 9%? Round your answer to the nearest cent.
- An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 19 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 19 more payments are to be made on Bond L. What will the value of the Bond L be if the going interest rate is 4%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 4%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is 10%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 10%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is 12%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 12%? Round your answer to the nearest centAn investor has two bonds in his portfolio that have a face value of $1,000 and pay a 6% annual coupon. Bond L matures in 12 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 12 more payments are to be made on Bond L. What will the value of the Bond L be if the going interest rate is 6%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 6%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is 8%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 8%? Round your answer to the nearest cent.$ What will the value of the Bond L be if the going interest rate is 13%? Round your answer to the nearest cent.$ What will the value of the Bond S be if the going interest rate is 13%? Round your answer to the nearest cent.$ Why does the longer-term…An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annual coupon. Bond L matures in 12 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturity and that 12 more payments are to be made on Bond L. a. What will the value of the Bond L be if the going interest rate is 4%? Round your answer to the nearest cent. $ What will the value of the Bond S be if the going interest rate is 4%? Round your answer to the nearest cent. $ What will the value of the Bond L be if the going interest rate is 9%? Round your answer to the nearest cent. $ What will the value of the Bond S be if the going interest rate is 9%? Round your answer to the nearest cent. $ tA What will the value of the Bond L be if the going interest rate is 14%? Round your answer to the nearest cent. $ What will the value of the Bond S be if the going interest rate is 14%? Round your answer to the nearest cent. $ b. Why does the…
