A $$1,000$ bond has a $7\mathrm{.}5$ percent coupon and matures after $11$ years. If current interest rates are $9$ percent, what should be the price of the bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

$$$

If after four years interest rates are still $9$ percent, what should be the price of the bond? Use Appendix B and Appendix D to answer the question. Assume that the bond pays interest annually. Round your answer to the nearest dollar.

$$$

Even though interest rates did not change in a and b$,$ why did the price of the bond change?

The price of the bond with the longer term is $-$Select$-$lesshigherItem $3$ than the price of the bond with the shorter term as the investors will collect the $-$Select$-$smallerhigherItem $4$ interest payments and receive the principal within a longer period of time.

Change the interest rate in a and b to $7$ percent and rework your answers. Assume that the bond pays interest annually. Round your answers to the nearest dollar.

Price of the bond $(11$ years to maturity$)$: $$$

Price of the bond $(7$ years to maturity$)$: $$$

Even though the interest rate is $7$ percent in both calculations, why are the bond prices different?

The price of the bond with the longer term is $-$Select$-$lesshigherItem $7$ than the price of the bond with the shorter term as the investors will collect the $-$Select$-$smallerhigherItem $8$ interest payments for a longer period of time.