|Author||Topic: Valuation of amortizing Security|
|I encountered the following in the curriculum. Can someone advise on how to approach this?
A 5 Year amortizing security with a par value of 10,000 and a coupon rate of 5% has an expected cash flow of $2309.75/year, assuming there are no principal prepayments. The annual cash flow includes interest and principal payment. What is the PV of this amortizing security assuming a discount rate of 6%?