finance question

Feb 3rd, 2012
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An investor has two bonds in his portfolio. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity equal to 9.6%. One bond, Bond C, pays an annual coupon of 10%; the other bond, Bond Z, is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 9.6% over the next 4 years, what will be the price of each of the bonds at the following time periods? Fill in the following table: Prices of Bond C at 0, 1, 2, 3, 4 Prices of Bond Z at 0, 1, 2, 3, 4

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Bond C4 Years:Settlement Date01/01/00Maturity Date01/01/04Coupon Rate10.00%Yield to Maturity9.60%Redemption Value (% of par) 100Number of Payments1Price (% of par)101.279 $1,012.79Bond Z4 Years:Settlement Date01/01/00Maturity Date01/01/04Coupon Rate0.00%Yield to Maturity9.60%Redemption Value (% of par) 100Number of Payments1Price (% of par)69.303923 Years:Settlement Date01/01/00Maturity Date01/01/03Coupon Rate10.00%Yield to Maturity9.60%Redemption Value (% of par) 100Number of Payments1Price (% of par)101.0018 $1,010.023 Years:Settlement Date01/01/00Maturity Date01/01/03Coupon Rate0.00%Yield to Maturity9.60%Redemption Value (% of par) 100Number of Payments1Price (% of par)75.957092 Years:Settlement Date01/01/00Maturity Date01/01/02Coupon Rate10.00%Yield to Maturity9.60%Redemption Value (% of par) 100Number of Payments1Price (% of par)100.698 $1,006.982 Years:Settlement Date01/01/00Maturity Date01/01/02Coupon Rate0.00%Yield to Maturity9.60%Redemption Value (% of par) 100Number of Payments1Price (% of par)83.248971 Years:Settlement Date01/01/00Maturity Date01/01/01Coupon Rate10.00%Yield

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