1. You have a bond that matures in 25 years with a maturity value of $1,000. If the bond has a 6% semiannual coupon and the market requires a return of 8% on the bond, what is the current market price of the bond?
2. You are interested in purchasing a bond with no maturity date. The bond has a stated par value of $1,000 and a stated 5% coupon. Given the low level of risk that will be taken with the purchase you require a return of only 4%. What is the maximum price you would pay to purchase the bond?