At what discount rate would value of bond be at par

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Reference no: EM131906586

Compute the value of the following bonds assuming a 3% discount rate

a) a zero coupon bond that pays $1k in five years

b) a bond that pays $1k in five years, w/ 5 annual coupon payments of $20/ea

c) what is the coupon rate if coupon payments are $20/year? At what discount rate would the value of the bond be "at par" (e.g. be worth $1k, explain reasoning)

Reference no: EM131906586

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