2. The Market Value of Bonds

Consider a bond that promises to pay € 80 at the end of each year as coupon payment. 
The security has a time to maturity of five years and a face value of € 1,000. The current market interest rate of this bond is 0.8% per year. This bond is a ……….

Consider a bond that promises to pay € 80 at the end of each year as coupon payment. 
The security has a time to maturity of five years and a face value of € 1,000. The current market interest rate of this bond is 0.8% per year. What is the current market value of this bond?

Consider a bond that promises to pay € 50 at the end of each year as coupon payment. 
The security has a time to maturity of 10 years and a face value of € 1,000. The current market interest rate of this bond is 8% per year. What is the current market value of this bond?

A 4% perpetual bond with a face value of € 1,000 is traded on the market. The next interest payment will take place after one year. What is the market value of this bond when investors require a 3% rate of return on their investment?

Consider a bond that promises to pay € 20 at the end of each year as coupon payment. 
The security has a time to maturity of 10 years and a face value of € 1,000. The current market interest rate of this bond is 0% per year. What is the current market value of this bond?

If the market interest rate rises, the market value of a bond ……..

What will happen with the market value of a discount bond when it is announced that the bond loan will be repaid earlier than originally planned? The market value will ……

For a perpetual bond loan with a principal of € 10,000,000, the coupon rate is 5%. The current market interest rate of the bond is 10%. The next coupon payment is exactly after one year. The market value of the entire bond loan is ……….

A company took out a loan a few years ago with a principal of € 2,000,000. The entire loan will be repaid after five years from now. To the provider of the loan, an interest is paid of 8% per year. The current market interest rate for this loan is 4%. What is the (rounded) current market value of the loan?