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Bond X is a premium bond making annual payments. The bond pays an 8.8 percent coupon, has a YTM of 6.8 percent, and has 13 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 6.8 percent coupon, has a YTM of 8.8 percent, and also has 13 years to maturity. Assume the interest rates remain unchanged.
Requirement 1:
What are the prices of these bonds today? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Requirement 2:
What do you expect the prices of these bonds to be in one year? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Prices
Bond X $ $1,160.56
Bond Y $ $855.33
Requirement 3:
What do you expect the prices of these bonds to be in three years? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Requirement 4:
What do you expect the prices of these bonds to be in eight years? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Requirement 5:
What do you expect the prices of these bonds to be in 12 years? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Requirement 6:
What do you expect the prices of these bonds to be in 13 years? (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations.)