10-year government coupon bond has a face value of $1,000 and a coupon rate of 5% paid annually. Assume that the interest rate is 6% per year. What is the bond’s PV? (You can sum the PVs for each of the coupon pay
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A 10-year government coupon bond has a face value of $1,000 and a coupon rate of 5% paid annually. Assume that the interest rate is 6% per year. What is the bond’s PV?
(You can sum the PVs for each of the coupon payments and the final $1,000, or you can use the annuity formula in the text (at p. 103) to save some work.)
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