Question

Calculate the fair present value of the following bonds, all of which have a 10 percent coupon rate (paid semiannually), face value of $ 1,000, and a required rate of return of 8 percent.
a. The bond has 10 years remaining to maturity.
b. The bond has 15 years remaining to maturity.
c. The bond has 20 years remaining to maturity.
d. What do your answers to parts (a) through (c) say about the relation between time to maturity and present values?



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  • CreatedJanuary 27, 2015
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