Annual coupon bond when the discount rate

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Practice Question 1

1. What is the value of a 5-year 7% annual coupon bond when the discount rate is
A. 6%
B. 7%
C. 8%
D.Show that the results obtained above are consistent with the relationship between the coupon rate, discount rate, and price relative to par given in the text?

Practice Question 2

2. Calculate the price of a:
a. 4-year 10% annual coupon bond with an 8% discount rate.
b. 4-year 10% semi-annual coupon bond with an 8% discount rate

Practice Question 3

3. What is the value of a:
a. 5-year zero coupon bond with a par value of $1000 and an 8% discount rate?
b. Perpetuity which pays $1500 annually when the yield to maturity is 10%

Reference no: EM131065055

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