Calculate the bond price for a risk free bond that pays $1,000 with 100% certainty in one year. The risk free rate is 4%

Interview Question: Calculate the bond price for a risk free bond that pays $1,000 with 100% certainty in one year. The risk free rate is 4%.

Answer: Discount the payout for one year by the risk free rate.

Bond price = 1000 / (1 + 0.04) = $961.5

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