Suppose that a Treasury bond was issued 27 years ago, so it will mature in three years If the bond pays a coupon of $50 per year and will make a final face value payment of $1,000 at maturity, what is its price if the relevant market interest rate is 5 What is its price if the relevant market inter...

Suppose that a Treasury bond was issued 27 years ago, so it will mature in three years.

Question:

Suppose that a Treasury bond was issued 27 years ago, so it will mature in three years. If the bond pays a of $50 per year and will make a final payment of $1,000 at maturity, what is its price if the relevant market interest rate is 5%? What is its price if the relevant market interest rate is 10%?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...