Question 1 Value the following three bonds and describe whether the bonds selling at Par value, at a discount or at a pr

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Question 1
Value the following three bonds and describe whether the bonds
selling at Par value, at a discount or at a premium
(a).. A four year zero coupon bond, with a par value of
£200.
(b).. A four year corporate bond, with a coupon rate of 6% and a
face value of £500 (coupons are paid annually).
(c)..A five year UK gilt, with a coupon rate of 4% and a face
value of £100 (coupons are paid semi-annually).




The yield to maturity on the zero coupon bond is 5%, on the four
year corporate bond is 9% and for the five year UK gilt, it is
10%.