Question

eBook An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.2%. Bond C pays a 11% annual coupon, while Bond Z is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 8.2% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z 4 $ $ 3 $ $ 2 $ $ 1 $ $ 0 $ $ Select the correct graph based on the time path of prices for each bond. The correct sketch is .

Answer 1

As per rules I am answering the first 4 subparts of the question

		Price	Price
Sub part	Term	Bond C	Bond Z
1	4	$1,092.33	$729.61
2	3	$1,071.90	$789.44
3	2	$1,049.79	$854.17
4	1	$1,025.88	$924.21
	0	$1,000.00	$1,000.00

WORKINGS