An investor has two bonds in his portfolio. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity equal to 9.6%. One bond, Bond C, pays an annual coupon of 10%; the other bond, Bond Z, is a zero coupon bond.
Assuming that the yield to maturity of each bond remains at 9.6% over the next 4 years, what will be the price of each of the bonds at the following time periods? Assume time 0 is today.
Fill in the following table. Round your answers to the nearest cent.
How do i figure out the answer using excel what if analysis data table?
| t |
price of bond c |
price of bond z |
| 0 |
|
|
|
1
|
|
|
| 2 |
|
|
| 3 |
|
|
| 4 |
|
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