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CFA Level 1
Fixed Income

Discounted Cash Flow Valuation of a Bond

Medium Fixed Income Valuation Discounted Cash Flow

This question evaluates your understanding of the valuation of fixed income securities through the concept of discounted cash flow (DCF). Suppose you are analyzing a 10-year bond with a face value of $1,000, which offers an annual coupon payment of $80. The current market interest rate is 6%. Calculate the fair value of the bond using the DCF method.

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