Let's use the intrinsic valuation approach to estimate what is the fair price for the following fixed income security:

a bond with a 10-year maturity (will be repaid in 10 years), face value of 1 000 EUR (this amount of money will be repaid in 10 years time), and a coupon payment of 3% (investors are paid 3% of the face value each year).

Select all correct answers below (use the following template if the calculations are not straightforward).

a.

bond fair price equals to 1 000 if the required rate of return equals 3%

b.

bond fair price equals to 846 if the required rate of return equals 5%

c.

bond fair price equals to 1 090 if the required rate of return equals 2%

d.

bond fair price equals to 1 000 if the required rate of return equals 0%