Problem $13-01$

A $$1,000$ bo $9$ has a coupon of $4$ percent and matures after $10$ years. Assume that the bond pays interest annually.

a$.$ What would be the bond's price if comparable debt yields $7$ percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

$ $$

b$.$ What would be the price if comparable debt yields $7$ percent and the bond matures after $5$ years? Use Appendix. B and Appendix D to answer the question. Round your answer to the nearest dollar.

$ $$

c$.$ Why are the prices different in a and $b?$

The price of the bond in $a$ is $$ than the price of the bond in $b$ as the principal payment of the bond in $a$ is $-$Select$-$ than the principal payment of the bond in $b($in time$).$

d$.$ What are the current yields and the yields to maturity in a and $b?$ Round your answers to two decimal places.

The bond matures after $10$ years:

CY: $\%$

YTM: $\%$

The bond matures after $5$ years:

Cr: $\%$

YTM: $\%$ nearest dollar.

Bond part a: $ $$

Bond parto: $ $$

f$.$ Calculate the percentage change in the price of each bond. Round your answers to one decimal place. Enter your answers as a positive value.

Bond parta: $$ of $\%$

Bond part $b$ : $$ of $$