Question: 2. Consider two bonds, X and Y. Both have a face value of $100.00. Bond X has a 4% coupon rate, while Bond Y has
2. Consider two bonds, X and Y. Both have a face value of $100.00. Bond X has a 4% coupon rate, while Bond Y has an 89 coupon rate. Both bonds pay coupons semiannually. Bond X will mature in 20 years, and Bond y will mature in 5 years, Both bonds are selling to yleld 4%. a) What are the current prices of Bonds X and Bond Y? b) of the yields to maturity remain the same for both bonds two years from now, at what prices will Bonds X and Y sell two years from now (l.e, after 4 semiannual periods have elapsed)? C) Suppose now that, instead of remaining the same, the yields to maturity on Bonds X and Y both turn out to be 6.00% two years from now. At what prices will bonds X and Y sell two years from now? Specifications: APA paper, double spaced, 12 font, 1-inch margin (top, bottom, left and right)
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