Please see question attached.Thank you. YearsremainingtoMaturity6% p.a.6% p.a.BOND ACoupon rate = 8% p.a.Market interest rate =BOND BCoupon rate = 6% p.a.Market interest rate =BOND CCoupon rate = 4% p.a.Market interest rate =6% p.a.10$1,147.2017$1,000.0000$852.79839$1,136.0338$1,000.0000$863.96628$1,124.1959$1,000.0000$875.80417$1,111.6476$1,000.0000$888.3524654$1,098.3465$1,000.0000$901.6535$1,084.2473$1,000.0000$915.75274$1,069.3021$1,000.0000$930.6979332$1,053.4602$1,000.0000$946.53982$1,036.6679$1,000.0000$963.33211$1,018.8679$1,000.0000$981.13210$1,000.0000$1,000.0000$1,000.0000Draw a graph showing how the bond price for each bond changes over time asthey move towards their maturity dates. Describe the relationship between bondprices and the time remaining for maturity.

Years remaining to Maturity 6% p.a. 6% p.a. BOND A Coupon rate = 8% p.a. Market interest rate = BOND B Coupon rate = 6% p.a. Market interest rate = BOND C Coupon rate = 4% p.a. Market interest rate = 6% p.a. 10 $1,147.2017 $1,000.0000 $852.7983 9 $1,136.0338 $1,000.0000 $863.9662 8 $1,124.1959 $1,000.0000 $875.8041 7 $1,111.6476 $1,000.0000 $888.3524 6 $1,098.3465 $1,000.0000 $901.6535 5432 $1,084.2473 $1,000.0000 $915.7527 $1,069.3021 $1,000.0000 $930.6979 $1,053.4602 $1,000.0000 $946.5398 $1,036.6679 $1,000.0000 $963.3321 1 $1,018.8679 $1,000.0000 $981.1321 0 $1,000.0000 $1,000.0000 $1,000.0000 Draw a graph showing how the bond price for each bond changes over time as they move towards their maturity dates. Describe the relationship between bond prices and the time remaining for maturity.

Years remaining to Maturity 6% p.a. 6% p.a. BOND A Coupon rate = 8% p.a. Market interest rate = BOND B Coupon rate = 6% p.a. Market interest rate = BOND C Coupon rate = 4% p.a. Market interest rate = 6% p.a. 10 $1,147.2017 $1,000.0000 $852.7983 9 $1,136.0338 $1,000.0000 $863.9662 8 $1,124.1959 $1,000.0000 $875.8041 7 $1,111.6476 $1,000.0000 $888.3524 6 $1,098.3465 $1,000.0000 $901.6535 5432 $1,084.2473 $1,000.0000 $915.7527 $1,069.3021 $1,000.0000 $930.6979 $1,053.4602 $1,000.0000 $946.5398 $1,036.6679 $1,000.0000 $963.3321 1 $1,018.8679 $1,000.0000 $981.1321 0 $1,000.0000 $1,000.0000 $1,000.0000 Draw a graph showing how the bond price for each bond changes over time as they move towards their maturity dates. Describe the relationship between bond prices and the time remaining for maturity.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 3PA

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