What is the interest rate on this bond if it does not, Financial Management

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What is the interest rate on this bond if it does not

Imagine a discount bond that promises to pay you $1000 a year from now. Suppose the market interest rate is 5%

Suppose that the going price for this bond is $800.

i. What is the interest rate on this bond (if it does not default)?

ii. What is the expected return on this bond?

iii. What is the risk premium on this bond, if the interest rate on a one-year Treasury bond is 5%?

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Financial Management: What is the interest rate on this bond if it does not

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Financial Management: What is the interest rate on this bond if it does not

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