Bond value and timelong dashChanging required returns Personal Finance Problem Lynn Parsons is considering investing in either of two outstanding bonds. The bonds both have $1 comma 000 par values and 13 % coupon interest rates and pay annual interest. Bond A has exactly 5 years to maturity, and bond B has 15 years to maturity. a. Calculate the present value of bond A if the required rate of return is: (1) 10 %, (2) 13 %, and (3) 16 %. b. Calculate the present value of bond B if the required rate of return is: (1) 10 %, (2) 13 %, and (3) 16 %. c. From your findings in parts a and b , discuss the relationship between time to maturity and changing required returns. d. If Lynn wanted to minimize interest rate risk, which bond should she purchase? Why?
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