What do you expect the prices of these bonds to be in 14


Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.7 percent, a YTM of 7.7 percent, and has 14 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7.7 percent, a YTM of 9.7 percent, and also has 14 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000.

What do you expect the prices of these bonds to be in 14 years?

PriceBond X $

Bond Y $

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Financial Management: What do you expect the prices of these bonds to be in 14
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