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A Certificate of Deposit (CD) is expected to generate $102.00 in one year. What is the maximum price you would pay? What went into your
A Certificate of Deposit (CD) is expected to generate $102.00 in one year. What is the maximum price you would pay? What went into your decision? A bond pays $1000/year for 5 years. The price of the bond is $4,500. Should you buy the bond? If not, what is the maximum price you would pay? What went into your decision? You own a zero-coupon bond with a single payment of $1,500 in 7 years. What is the minimum price (not a fire sale) you should accept to sell the bond? What went into your decision? You win the lottery and can have $300,000/year for life or $8.0 million today. Which would you choose? What went into your decision
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