1. What are short-term liabilities and why are they so important to manage? Please use one example to illustrate your point.
2. You are a trader from Goldman Sachs, and you are selling a 25 year bond, having a 7.25% coupon rate, and Par Value (i.e. Face Value) of $1,000. The market rate is 6.25%. If the bond offers semi-annual coupons, what is the minimal price for which you are willing to sell this bond today? Assume no transaction costs. (Hint: Use Excel’s PV function, and the annuity discounting formula for pricing this bond – please show all steps.