Consider a bond with a face value of $1000 and a coupon of $100. Suppose the interest

Question:

Consider a bond with a of $1000 and a of $100. Suppose the interest rate is 10 percent. Does the PDV of the promised payments depend on the bond's maturity? Why or why not? Think about putting $1000 in a bank account that pays 10 percent interest. If you withdraw $100 at the end of each year, what do you always have left?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...