Compute the present values of the following bond using three (3) different discount rates.

Face Value = $1,000

Coupon rate = 12%

Coupons are paid once in a year.

Compute the PV of the bond using:

i.Discount rate of 14%

ii.Discount rate of 12%

iii.Discount rate of 10%

iv.Discuss the relationship between PV of a bond and different discount rates.

4.Define risk in finance

5. Define return