### Value of the bond at the present time

Assignment Help Portfolio Management
##### Reference no: EM13214524

You need to present to your client, Alice Cartwright, some investment options for her to choose from. Her choices are between the following 2 bonds:

 Bond Description Face Value Coupon Rate Years to Maturity Bond A corporate bond in ABA company \$1,000 10% coupon 12 years, paying annual payments Bond B corporate bond in ABA company \$1,000 10% coupon 2 years, paying annual payments

For each bond, answer the following questions:

• What is the valuation of the bond if the market interest rates are 12%?
• What is the valuation of the bond if the market interest rates are 6%?
• What is the valuation of the bond if the market interest rates are 2%?
• What is the value of the bond at the present time?
• What will the bond be worth at maturity?
• Are there differences in bond prices? If so, explain why.

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