A bond's credit rating provides a guide to its price. Suppose Aaa bonds yield 3.4% and Baa bonds yield 4.4%. Assume a 5-year 10% bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

to. What is the price of the bond if it is rated Aaa?

Bond price =?

b. What is the price of the bond if it is rated Baa?

Bond price =?

Answer rating: 100% (QA)

a If the bond is rated Aaa and yields 34 we can use the present value formul... View the full answer