Final answer:
The features of a bond include its coupon rate, maturity date, price, and yield. These features determine the bond's present value and timing of cash flows, comprising periodic interest payments and the return of principal at maturity.
Step-by-step explanation:
The question you've provided involves explaining and describing the features of the bond and the timing of the expected cash flows. When discussing a bond, we are referring to a form of debt investment where an investor loans money to an entity that borrows the funds for a defined period at a variable or fixed interest rate. The features of a bond include the coupon rate or interest rate, which is the return the investor will receive, paid periodically and often semi-annually.
The bond also has a maturity date, which is when the principal, known as the face value, and the last interest payment are due to be paid back to the investor. The bond's price is what an investor pays to purchase the bond, which may be different from the face value, depending on current market interest rates. The yield represents the earnings over the holding period of the bond, expressed as an annual rate. Understanding these features and the relationship between the bond's price, yield, and the current market interest rates helps determine the present value of the bond.
The present value is the maximum an investor would be willing to pay today for a series of future cash flows, given a specific discount rate (which often corresponds to market interest rates). The cash flows from a bond include the periodic interest payments and the return of the bond's face value at maturity. If today is January 1, 2023, an investor purchasing the bond will expect to receive the interest payments as scheduled (typically semi-annually) up until the maturity date, at which point the final interest payment and the face value will be paid out.