2. A government bond with face value $1,000 matures next year. This means that next year the government will send the bond holder a $1,000 cheque (the bond is not worth anything afterwards). If the interest rate is 2.8%, what is the bond’s market price today? Explain.

Answer rating: 100% (QA)

You are correct Because the bond matures in one year the investor will receive the face value of 100... View the full answer