Homework answers / question archive / What is the value today of the following two bonds? Which of the two bonds has a greater value today – bond A or B? (10 points) Bond A:                                                                                  Par Value: $1,200 Coupon Rate = 10% paid annually Yield to Maturity = 5% Maturity = 4 Years Bond B: Par Value: $1,600 Coupon Rate = $110 paid annually Yield to Maturity = 3

What is the value today of the following two bonds? Which of the two bonds has a greater value today – bond A or B? (10 points) Bond A:                                                                                  Par Value: $1,200 Coupon Rate = 10% paid annually Yield to Maturity = 5% Maturity = 4 Years Bond B: Par Value: $1,600 Coupon Rate = $110 paid annually Yield to Maturity = 3

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What is the value today of the following two bonds? Which of the two bonds has a greater value today – bond A or B? (10 points)

Bond A:                                                                                 

Par Value: $1,200

Coupon Rate = 10% paid annually

Yield to Maturity = 5%

Maturity = 4 Years

Bond B:

Par Value: $1,600

Coupon Rate = $110 paid annually

Yield to Maturity = 3.5%

Maturity = 6 Years