What do you predict as the price of a perpetuity today that pays $400 per year starting in 7 years when the discount rate is 3 percent? Please show.
What is the rate of return from t to t+1 on a bond that is priced at $2,000 initially, provides a coupon payment at time t+1 of $40, and has its price rise to $2,100 at time t+1?