Problem 10-16 Bond Price Movements (LO1, CFA5) Bond P is a premium bond with a c

Question

Problem 10-16 Bond Price Movements (LO1, CFA5) Bond P is a premium bond with a coupon of 9.4 percent, a YTM of 8.15 percent, and 15 years to maturity. Bond D is a discount bond with a coupon of 9.4 percent, a YTM of 11.15 percent, and also 15 years to maturity. If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 5 years? In 10 years? In 14 years? In 15 years? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) Bond P Bond D 1 year 5 years 10 years 14 years 15 years

Explanation / Answer

Bond Price can be calculated using PV function in excel or financial calculator

Bond P Bond D 1 $1,102.16 $878.78 5 $1,083.31 $897.58 10 $1,049.71 $935.57 14 $1,011.56 $984.26 15 $1,000.00 $1,000.00

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