What are the key features of a bond how do you determine


What are the key features of a bond?

How do you determine the value of a bond?

What is the value of a 1-year, $1,000 par value bond with a 10% annual coupon if its required rate of return is 10%?

What is the value of a similar 10-year bond?

What would be the value of the bond described in part?

 

If, just after it had been issued, the expected inflation rate rose by three percentage points, caus­ing investors to require a 13% return? Is the security now discounted bond or a premium bond?

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