Question: Problem One. A $1,000 unit bond has a coupon rate of 4% (interest paid yearly at $40 per year). The bond has five years left

Problem One. A $1,000 unit bond has a coupon rate of 4% (interest paid yearly at $40 per year). The bond has five years left until it matures. The current market interest rate equals 5%. Compute the bonds market value today.

Problem Two. You can use the same fact situation as problem one. The only item that has change is current market interest rate equals 3%. Compute the bonds market value today.

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