Question: a. Write down the formula used to calculate the Present Value (PV) of a future Cash Flow (CF) for 'n' years.Using this formula, explain why

  1. a. Write down the formula used to calculate the Present Value (PV) of a future Cash Flow (CF)

for 'n' years.Using this formula, explain why the price of a coupon bond and the yield to maturity are negatively related.

  1. If there is anincreasein interest rates, which would you rather be holding, long-term bonds or short-term bonds? Why? Which type of bond has the greater interest-rate risk?

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