What is the value of a bond? A) The sum of the coupon payments of the bond. B)Th

Question

What is the value of a bond?

A) The sum of the coupon payments of the bond.

B)The present value of its coupon payments plus face value.

C)The future value of its cash flows.

D)The face value of the bond plus coupon payments.

E)The face value of the bond.

F)None of the above

A) The sum of the coupon payments of the bond.

B)The present value of its coupon payments plus face value.

C)The future value of its cash flows.

D)The face value of the bond plus coupon payments.

E)The face value of the bond.

F)None of the above

Explanation / Answer

B)The present value of its coupon payments plus face value.

Value of the bond = Present value of coupon payments+PV of face value

Thanks

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