# Question

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $ 1,000, have 12 years remaining to maturity, and have a required rate of return of 10 percent.

a. The bond has a 6 percent coupon rate.

b. The bond has a 8 percent coupon rate.

c. The bond has a 10 percent coupon rate.

d. What do your answers to parts (a) through (c) say about the relation between coupon rates and present values?

a. The bond has a 6 percent coupon rate.

b. The bond has a 8 percent coupon rate.

c. The bond has a 10 percent coupon rate.

d. What do your answers to parts (a) through (c) say about the relation between coupon rates and present values?

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