Five years ago, the City of Baltimore sold at par a $1,000 bond with a coupon...

Five years ago, the City of Baltimore sold at par a $1,000 bond with a coupon rate of 8 percent and 20 years to maturity. If this bond pays interest annually, what is the value of this bond to an investor who requires an 8 percent rate of return?

A. $607.72
B. $692.00
C. $1,000
D. cannot be determined from the information given
What is the value of an Orion bond that has a 10 percent coupon, pays interest annually, and has 10 years to maturity, if the required rate of return is 12 percent?
A. $1,200
B. $885.50
C. $895.27
D. $735.26

What is the market value of a $1,000 zero-coupon bond with 5 years to maturity. The market rate today is 9 percent.

A. $593
B. $650
C. $621
D. $495

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jeff jeffy answered 1 year ago

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