Question

What is the dollar price of a zero coupon bond with 7 years to maturity, semiannual compounding, and a par value of $1,000, if the YTM is: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

		Bond Price
a.	5 percent	$
b.	10 percent	$
c.	15 percent	$

Answer 1

rate positively ..

	We have to use the financial calculator to solve this
	put in calculator for eash individual case
			Case -a	Case -b	Case -c
	FV		1000	1000	1000
	PMT		0	0	0
	I		1.25%	2.50%	3.75%
	N	=7*4	28	28	28
	Compute PV	($706.22)	($500.88)	($356.72)
	Ans =		$706.22	$500.88	$356.72