Suppose you decide to buy a bond with $1000 face value with 1-year maturity. How much...

Question

Question

Suppose you decide to buy a bond with $1000 face value with 1-year maturity. How much you will pay for this bond if you use a discount rate of 5%?

Answer 1

Answer #1

Answer:

Amount Paid = Face value * discount rate = $1000 * 5%

= 1000 * 0.05 = 50

Thus amount pay for this bond if you use a discount rate of 5% is $50

Answer 2

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