1. A zero coupon bond has a face value of $1,000 and matures in 4 years. Investors require a(n) 6.1 % annual return on these bonds. What should be the selling price of the bond?
2. How much would you pay today for a 25-year annuity due that promises to pay $100 per year if the discount rate is 4.5%?
3. A Ford Motor Co. coupon bond has a coupon rate of 6.5% and pays annual coupons. The next coupon is due tomorrow and the bond matures 34 years from now. the yield on the bondis 6.05%, what price should the bond trade today assuming the face value si $1000.