一、Valuation of Bonds
二、The Term Structure of Interest Rates
三、 Alternative Investment Rules
(1) The Payback Period Rule
(2) The Average Accounting Return
(3) The Internal Rate of Return
(4) The Profitability Index
四、Why Use Net Present Value?
(RWJ Ch.5,6)

Example 1：
     Suppose we observe the following bond prices for default-free zero coupon bonds (pure discount bond, with face value $1,000)
Pure Discount Bonds
Such a rate y is known as the yield to maturity (YTM). The yield to maturity is a complicated average of different rates of interest. It can be a useful summary measure