Bond X is a premium bond making annual payments. The bond pays an 13 percent coupon, has a YTM of 9 percent, and has 24 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 9 percent coupon, has a YTM of 13 percent, and also has 24 years to maturity. If interest rates remain unchanged, you would expect that 6 years from now, Bonds X and Y will be priced at $? and $?, respectively. And in 11 years: $? and $?.© BrainMass Inc. brainmass.com October 2, 2020, 1:51 am ad1c9bdddf
Let us assume Par Value of each bond=P=$1000
At the end of 6 years
In the case of Bond X
Number of coupon payments left=n=24-6=18
Price at the end of 6 years=C/r*(1-1/(1+r)^n)+P/(1+r)^n
Solution describes the steps to estimate price of coupon paying bonds.