1) You have the opportunity to purchase a four-year bond with a face value of $1,000 that pays 5% annual interest. How much should you pay for the bond if the current market rate of interest is 7%? Show your calculation/inputs.
2) List and describe the three Bond Theorems.
3) What would be the price of a $1,000 face value three-year bond with a coupon rate of 5%, paid semi-annually, providing a market yield of 8%? Show your calculations/inputs.