A 5%-coupon, interest-only, 30-year Treasury Bond is an asset that makes semiannual payments (that is, two payments a year) of $25 for 30 years. How much is such a bond worth now under an (annual) opportunity cost of capital of 3%?

A 5%-coupon, interest-only, 30-year Treasury Bond is an asset that makes semiannual payments (that is, two payments a year) of $25 for 30 years. 

How much is such a bond worth now under an (annual) opportunity cost of capital of 3%? 

Expert Answer

To calculate the present value of the bond, we need to discount the View the full answer