An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 10% annual coupon. bond l matures in 15 years, while bond s matures in 1 year. a. what will the value of each bond be if the going interest rate is 5%, 8%, and 12%? assume that only one more interest payment is to be made on bond s at its maturity and that 15 more payments are to be made on bond l. b. why does the longer-term bond’s price vary more than the price of the shorter-term bond when interest rates change?

Lipman auto parts, a family-owned auto parts store, began january with $10,300.00 in cash. management forecasts that collections from credit customers will be $11,400.00 in january and $14,800.00 in february. the store is scheduled to receive $5,000.00 in cash on a business note receivable in january. projected cash payments include inventory purchases ($13,000.00 in january and $13,600.00 in february) and operating expenses ($2,700.00 each month). lipman auto parts' bank requires a $10,000.00 minimum balance in the store's checking account. at the end of any month when the account balance dips below $10,000.00, the bank automatically extends credit to the store in multiples of $1,000.00. lipman auto parts borrows as little as possible and pays back loans in quarterly installments of $2,000.00, plus 4 percent interest on the entire unpaid principal. the first payment occurs three months after the loan.