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5. The Mariposa Co. has two bonds outstanding. One was issued 25 years ago at a...

5. The Mariposa Co. has two bonds outstanding. One was issued 25 years ago at a coupon rate of 9%. The other was issued 5 years ago at a coupon rate of 9%. Both bonds were originally issued with terms of 30 years and face values of $1,000. The going interest rate is 14% today.

a. What are the prices of the two bonds at this time?

b. Discuss the result of part a. in terms of risk in investing in bonds.

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