1. Assume that the 3% level-coupon bond discussed in this chapter has not just 5 years with 10 payments, but 20 years with 40 payments. Also, assume that the interest rate is not 5% per annum, but 10.25% per annum.
What are the bond payment patterns and the bond's value?
2. Check that the rates of return in the coupon bond valuation example on page 52 are correct.