**Problem 13-01**

A $1,000 bond has a coupon of 8 percent and matures after ten years. Assume that the bond pays interest annually.

- What would be the bond’s price if comparable debt yields 9 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.
- What would be the price if comparable debt yields 9 percent and the bond matures after five years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.
$

- Why are the prices different in
*a*and*b*?

The price of the bond in*a*is -Select-lessgreaterItem 3 than the price of the bond in*b*as the principal payment of the bond in*a*is -Select-further outcloserItem 4 than the principal payment of the bond in*b*(in time). - What are the current yields and the yields to maturity in
*a*and*b*? Round your answers to two decimal places.The bond matures after ten years:

CY: %

YTM: %The bond matures after five years:

CY: %

YTM: % Get Finance homework help today