The market value of a bond is equal to:
A) The present value of the principal of the bond.
B) The future value of all future cash payments provided by a bond.
C) The present value of all future interest payments provided by a bond.
D) The present value of all future cash payments provided by a bond.
E) The future value of all future interest payments provided by a bond.

Question

Quizplus · Accepted Answer

The market value of a bond is determined by the present value of all future cash flows, which include both the interest payments (coupons) and the principal repayment at maturity.

The Market Value of a Bond Is Equal To