A risk-free bond will pay you 1000 in 1 year the annual


1. A risk-free bond will pay you $1000 in 1 year. The annual discount rate is i = 3.45% compounded annually. What is PV of the bond?

2. A risk-free bond will pay you $1000 in 2 years and nothing in between. The annual discount rate is i = 3.15% compounded annually. What is the bond’s PV?

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Financial Management: A risk-free bond will pay you 1000 in 1 year the annual
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