finance homework project 2

 

You need to present to your client, Alice Cartwright, some investment options for her to choose from. Her choices are between the following 2 bonds:

 

Bond	Description	Face Value	Coupon Rate	Years to Maturity
Bond A	corporate bond in ABA company	$1,000	10% coupon	12 years, paying annual payments
Bond B	corporate bond in ABA company	$1,000	10% coupon	2 years, paying annual payments

 

For each bond, answer the following questions:

 

• What is the valuation of the bond if the market interest rates are 12%?
• What is the valuation of the bond if the market interest rates are 6%?
• What is the valuation of the bond if the market interest rates are 2%?
• What is the value of the bond at the present time?
• What will the bond be worth at maturity?
• Are there differences in bond prices? If so, explain why.

 

 

 

** Paper has to be APA style and at least 500 600 words, plus calculations showing all work. **