1 Check My Work (a remaining) 2. 3. CO 4 5. eBook Problem Walk-Through An Investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annunt coupon. Bond matures in 18 years, while Bond S matures in 1 year a. What will the value of the Bond Ube if the going interest rate is 5%,7%, and 11%7 Assume that only one more interest payment is to be made on Bond S at its maturity and that 18 more payments are to be made on Bond L. Round your answers to the nearest cent. 5% 11% $ 6. 7 796 8 Bond L $ $ 9. 10. 11 Bond S $ $ ob. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? I. The change in price due to a change in the required rate of return increases as a bond's maturity decreases II. Long-term bonds have greater interest rate risk than do short-term bonds. III. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. IV. Long-term bonds have lower interest rate risk than do short-term bonds V. Long-term bonds hike lower reinvestment rate risk than do short-term bonds. -Select- 12