True or false: Value of a bond is not the Present Value of the Cash Flows

Question

Question

True or false:

Value of a bond is not the Present Value of the Cash Flows

Answer 1

Answer #1

False

Not only bond, the value of any kind of Financial asset is present value of the cash flows received from that particular asset

The formula for bond value

= (coupon payment*PVFA)+ (maturity value*PVF)

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Answer 2

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