Bond Assignment | Professional Writing
May 20th, 2020
10 points) Your friend Michael is interested in learning more about bonds.
a. Explain to Michael the meaning of a bond, at least three types of bonds that are available, and the key features of a bond.
b. Explain to Michael the meaning of a zero coupon bond and what is meant by a premium and a discounted bond.
c. In general, how is the price of a bond calculated (not the market value)?
d. Assume a bond has a par value of $1000. What does that mean?
e. If a $1000 bond has an annual coupon of 6% and matures in 10 years, what should the price be? Assume similar bonds have a yield of 8%. Assume annual interest payments.
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