1A. BONDS AND RISK

Assume you have some money and want to save to amass a given amount at the end of 5 years.

One of the options you have is a 5-year, 10% coupon bond that is currently selling at par. Assume that bond is default free.

What will determine the total amount of money you will have at the end of year 5 if you buy the bond today?

1B. VALUATION OF SECURITIES

Why is it inherently more difficult to value some assets than others?