Bonds Flashcards
1
Q
Present Value
A
how much should a bond be worth today when a guaranteed sum of money will be given on a specific date in the future.
2
Q
What is the Present Value of a 1000$ bond with a 5% discount rate maturing in 1 year?
A
PV = 1000/1.05
952.38
3
Q
What is the FV of 1000 dollars invested today at 5% interest rate for 5 years?
A
1,276.28
FV = PV (1 + i)r
