QUESTION 4: Compute the value of the following bonds assuming a 3% discount rate (required rate of return)

a. A zero-coupon bond that pays $1,000 in five years (Hint: PMT = 0)

b. A bond that pays $1,000 in five years, with five annual coupon payments of $20 each

c. What is the coupon rate if coupon payments are $20 per year? At what discount rate would the value of the bond be "at par" (e.g., be worth $1,000?). Explain your reasoning.

Coupon rate =

discount rate if value at par:

Explain answer for discount rate above.