Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:A US savings bond will pay you $1,000 in 3 years. If return is 2.85%, how much shoudl you pay for the bond today?
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The payment made for bond at current year will be such as investor will realize 2.85% in each of three years so it will be determined as the present value for $1,000 payment made after 3 years.
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