Response to the following questions:
1. What is discounting?
2. Bill expects to receive $3,000 from his grandfather when he graduates from college three years from today. What is the present value of the $3,000 if the relevant interest rate is 6% compounded anually?
3. Describe the two distinct obligations incurred by a corporation when issuing bonds.
4. If you asked your broker to purchase for you a 6% bond when the market interest rate for such bonds was 7%, would you expect to pay more or less than the face amount for the bond? Explain.