Crawford inc has two bond issues outstanding both paying, Ask an Expert

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Crawford Inc. has two bond issues outstanding, both paying the same annual interest of $55, called Series A and Series B. Series A has a maturity of 12 years, whereas Series B has a maturity of 1 year.

a. What would the value of each of these bond when the going interest rate is (1) 4 percent, (2) 7 percent, and (3) 10 percent? Assume that there is only one more interest payment to be mad on the Series b bonds.

b. Why does the longer-term (12-year) bond fluctuate more when interest rates change than does the shorter-term (1-year) bond?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91546440

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