Question

3. If the discount rate is equal to coupon rate, the fair value of a bond equals its maturity value True or False

4. If a firm's November net cash flow = 70, beginning cash for November is minus 100, its borrowing need for November is a. 100 b. 170 c. 30 d. not enough information is given to answer the question

Answer 1

Dear student, only one question is allowed at a time. I am answering the first question

3)

Price of a bond is the present value of all future cash flows receivable from the bond discounted at required rate of return

When the required rate of return or the discount rate is equal to the coupon rate, the cash flows will be discounted at the same rate as their coupon rate and this will result in the fair value to be equal to its maturity value

So, as per above discussion, the statement in the question is True