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A quick and easy bond question to warm up. A one-year discount bond promises to pay $96,750 dollars next year. The price of this bond
A quick and easy bond question to warm up. A one-year discount bond promises to pay $96,750 dollars next year. The price of this bond today in the bond market is $90,000. So, the interest rate on this bond is__ percent.
There is another discount bond in the market whose face value is the same as the previous one.This bond is riskier than the previous one and, thus, investors are willing to pay only 80,625 dollars for it. So, the interest rate on this second bond is ___ percent.
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