John is considering purchasing a bond with a face value of $5500 and a coupon rate
of 12 percent, due in 10 years. Inflation is expected to be 5 percent over the next 10
years. John's real MARR is 18 percent, compounded semiannually. What is the present
worth of this bond to John?
Answer rating: 100% (QA)
SOLUTION To find the present worth of the bond to John we need to consider the effect of inflation and discount the future cash flows at John s real MView the full answer