# Price of Bonds

1. What is the present value of:

(a) $9,000 in 7 years at 8 percent

2. If you invest $9,000 today , how much will you have :

(a) In 2 years at 9 percent

(d) In 25 years at 14 percent (compounded semi-annually)

3. How is valuation of any financial asset related to future cash flows?

4. What factors might influence a firm's price earnings ratio?

5. What was the purpose of the Sarbanes Oxley Act of 2002?

6. If inflationary expectations increase, what is likely to happen to yield to

maturity on bonds in the marketplace? What is also likely to happen to

price of bonds?

7. What two components make up the required rate of return on common

stock?

8. In what two ways do security markets provide liquidity?

9. If, as an investor , you had a choice of daily, monthly or , quarterly

compounding which would you choose and why

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#### Solution Preview

1. What is the present value of:

(a) $9,000 in 7 years at 8 percent

2. If you invest $9,000 today , how much will you have :

(a) In 2 years at 9 percent

(d) In 25 years at 14 percent (compounded ...

#### Solution Summary

This explains the computation of Price of Bonds and other financial values such as Present Value, Price Earning Ratio