Explain valuing bond based on the yield to maturity rate

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Explain Valuing Bond based on the yield to maturity rate

1. Nungesser Corporation\'s outstanding bonds have a $1,000 par value, an 8% semi-annual coupon, 9 years to maturity, and a 10% YTM. What is the bond\'s price? Round the answer to the nearest hundredth.

2. An investor has two bonds in his or her portfolio, Bond C and Bond Z. Each matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.7%. Bond C pays a 11.5% annual coupon while Bond Z is a zero coupon bond. Assuming that the yield to maturity of each bond remains at 8.7% over the next 4 years, calculate the price of the bonds at the following years to maturity and fill in the following table. Round the answers to the nearest hundredth.

Years to Maturity        Price of Bond C           Price of Bond Z

4

3

2

1

0

Reference no: EM1314583

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