Activity Overview
In this activity, students will deal with Bonds, that are long-term promissory notes, specifying that the creditor will receive regular interest payments for the term of the agreement and then receive the face amount of the bond. Students will have to estimate the market value of bonds and explore bond values versus current market interest rates.
About the Lesson
A bond is a long-term promissory note issued by a corporation. The associated contract, called the bond indenture, specifies that the creditor will receive regular interest payments for the term of the agreement and then receive the face amount of the bond. The coupon rate is the interest rate.