What is the price of this bond

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Q1. Suppose you have the opportunity to buy a bond with a par value of $1,000 and semi-annual coupon payments of $40 that matures in 10 years. Assuming a market rate of 5% (annual), what is the price of this bond?

Q2. Assume that the bond in problem 3 is selling for $1024. Using a spreadsheet program, what is the yield to maturity (to 2 decimal places)? What is the current yield?

Q3. Come up with an investment (i.e., a series of cash inflows and outflows) that has an NPV curve with a positive slope, i.e., the NPV increases as rates increase. Sketch or create the curve using a spreadsheet program.

Reference no: EM132844268

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