bonds
Two bonds have par values of $1,000. One is a 5%, 14-year bond priced to yield 8.5%. The other is a(n) 9%, 21-year bond priced to yield 6.5%. Which of these two has the lower price? (Assume annual compounding in both cases.)
The price, PV, of the 5%, 14-year bond is $. (Round to the nearest cent.)
The price, PV, of the 9%, 21-year bond is $. (Round to the nearest cent.)
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Which of these two has the lower price? (Select the best answer below.)
The 5%, 14-year bond has lower price of $719.65
The 9%, 21-year bond has lower price of $719.65
