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    AndersAA's Avatar
    AndersAA Posts: 1, Reputation: 1
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    #1

    Feb 28, 2008, 07:33 PM
    The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual inter
    The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest
    plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year.
    a. What will be the value of each of these bonds when the going rate of interest is (1) 5 percent,
    (2) 8 percent, and (3) 12 percent? Assume that there is only one more interest payment
    to be made on Bond S.
    b. Why does the longer-term (15-year) bond fluctuate more when interest rates change than
    does the shorter-term bond (1-year)?
    Clough's Avatar
    Clough Posts: 26,677, Reputation: 1649
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    #2

    Feb 29, 2008, 04:02 AM
    Is this a homework question? If so, please read the information on the following link. https://www.askmehelpdesk.com/math-s...-b-u-font.html

    Read this first: Expectations for the Homework Help board
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    We won't do your homework questions for you.
    You were given the assignment for you to learn.

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    If you have some SPECIFIC questions that you couldn't find or didn't understand, we may help with that.
    But this is your assignment, so show us you have at least attempted to complete it on your own.

    Thank you.
    rabia khalid's Avatar
    rabia khalid Posts: 2, Reputation: 1
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    #3

    Dec 19, 2012, 03:22 AM
    part a answers for bond L are 1519, 1171, and 864 and for bond S 1047, 1019 and 982
    part b answers according to me is that the value of long term bond fluctuate more when interest changes because of time value of money concept..
    I want to confirm the ans for part b
    rabia khalid's Avatar
    rabia khalid Posts: 2, Reputation: 1
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    #4

    Dec 19, 2012, 03:26 AM
    art a answers for bond L are 1519, 1171, and 864 and for bond S 1047, 1019 and 982
    part b answers according to me is that the value of long term bond fluctuate more when interest changes because of time value of money concept..
    I want to confirm the ans for part b

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