Write down the right answer of the given questions
Question 1- Assume that the current rate of interest on bonds is 3 percent. Compute the value of a bond with 5 years to maturity, pays a 5 percent coupon ($50 interest payment) each year, and has a face value of $1,000.
Part 1- Compute PV in each scenario as well.
Part 2-What happens to the price (PV) if the interest rate goes to 4 percent?
Part 3- What if it was 2 percent?
Question 2- Explain why hiring an investment manager based soley on the high return he has been able to earn recently may not be a good idea?
I need help to compute the PV in above problem.