Q.6. Bonds (Topic 7)
1. Outline some of the distinctive features of bond markets, including the range of issuers and their
motivations.
Explain the principal characteristics of typical bond instruments such as face value, maturity,
coupon, and market price, in the context of a specific example (either a numerical example of your
own construction, or from real-world financial data).
Explain and illustrate using a numerical example how we may price a bond with periodic fixed
coupon payments as well as terminal principal payment over a fixed number of periods.