Question 1

Consider a zero-coupon bond with face value $1,000. The bond has 23 years to mature. Current discount rate is 8.75 percent. What is the current price of the bond?

question 2

An investment will pay you $21,000 every year starting 4 year from today and goes on forever (this is a perpetuity). If the interest rate is 27 percent p.a., what is the present value of this cashflow?

Question 3

A 11 percent $1,000 bond matures in 7 years, pays interest annually, and is currently priced at 930. The yield to maturity (YTM) of the bond is ____%?

hint: you are calculating the discount rate of the bond (the yield to maturity)