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 Suppose you are offered two bonds

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 Suppose you are offered two bonds. The first bond is a one-year bond paying a coupon of $100 and an unknown face value at the end of the year. The second bond is a consol (perpetuity) offering an annual payment of $50. Give all answers to two decimals. 1st attempt Part 1 (1 point) See Hint Suppose the interest rate is 10% and the face value of the bond is $800. The most you should be willing to pay for the one-year bond is $
Part 2 (1 point) See Hint Suppose the interest rate is 10%. The most you should be willing to pay for the perpetuity is $ Part 3 (1 point) See Hint , you would be indifferent between buying the one-year Suppose the interest rate is 10%. If the bond had a face value of $ bond and buying the perpetuity. Part 4 (1 point) See Hint %, you would be indifferent between Suppose the face value on the one-year bond is $800. If the interest rate were buying the one-year bond and buying the perpetuity.