What is the present value of a $1,000 bond that pays an annual coupon payment of $90 at the end of each of the next four years and then matures at the end of year 4? Assume the market rate of interest is 8%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
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What is the present value of a
$1,000 bond that pays an annual
coupon payment of $90 at the end
of each of the next four years and
then matures at the end of year 4?
Assume the market rate of interest
is 8%.
Transcribed Image Text:What is the present value of a $1,000 bond that pays an annual coupon payment of $90 at the end of each of the next four years and then matures at the end of year 4? Assume the market rate of interest is 8%.
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