Q Search this cou Ch 07: Assignment - Bonds and Their Valuation Back to Assignment Attempts D Keep the Highest 0/7 4. Problem 7.05 (Band Valuation) ekook Problem Walk Through An investor has two bond in his port that have a face value of $1,000 and Day a 10% anual coupon Bond matures in 17 years, while Bond Smatures in 1 year What will the value of the Bond Leif the going interest rate is 5%, 74, 1152 Assume that only one more interest payment is to be made in and at its maturity and that 17 more payments are to be made on bond Round your answers to the nearestent 79 11% Bond $ $ 5 Bonds 5 Why does the longer term band's pro vary more than the price of the shorter-term bood when interest rates change? 1. The change price due to change in the required rate of retum decreases as a bond's maturity increases Ing-term and we w interest rate risk than do short formbonde I tag-term bondehere lower revestment rute nuk than do short-term bonds IV. The change in price due to a change in the required rate of return increases as a bond's maturity decreases og bonds have greater interest rate is than do short term bonds Grade it Now Save & Continue Continue without saving O >