Problem $13-01$

A $$1,000$ bond has a coupon of $7$ 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 $9$ 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 $9$ percent and the bond matures after $5$ years? Use Appendx B and Appendix D to arswer the questich

Round your answer to the nearest dollar:

$5$

e why are the prices dfferent in a and b$?$

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

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

The bond matures after $10$ years:

Cr $\%$

YTM: $\%$

The bond matures after $5$ years:

CV: $\%$

YTM: $\%$

e$.$ If interest rates increase $100$ basis points $($that is$,$ from $9$ percent to $10$ percent$),$ what are the new prices of both bonds assuming annual compounding? Use Appendix. B and Appendix. D to answer the question. Round your answer to the nearest dollar.

Bond parta: $5$

Bond part b : $ $$

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

Bond pert of $$ of $\%$

Bond part it $$ of $\%$