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Business, 26.10.2019 06:43 jadentdaniels

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 15 years, while bond s matures in 1 year. a. what will the value of each bond be if the going interest rate is 5%, 8%, and 12%? 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. b. why does the longer-term bond’s price vary more than the price of the shorter-term bond when interest rates change?

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