ZuoTi.Pro
Question

7. Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 4.5 %. (Do not round int


7. Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 4.5 %. (Do not round int

thats the only information given
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Suppose the face value=$1000
Coupon payment is $0
Time period=20 years
Yield to maturity=4.5%

1 Face Value 1000 2 Coupon payment 3 Time period 20 4 Yield to maturity 4.50% 5 Present value= ($414.64) 6 Formula used: PV(1

Price of the bond is $414.64

0 0
Add a comment
Know the answer?
Add Answer to:
thats the only information given 7. Calculate the price of a zero coupon bond that matures...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Item 7Item 7 Calculate the price of a zero-coupon bond that matures in 15 years if...

    Item 7Item 7 Calculate the price of a zero-coupon bond that matures in 15 years if the market interest rate is 3.5 percent. Assume semiannual compounding. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

  • Calculate the price of a zero-coupon bond that matures in 24 years if the market interest...

    Calculate the price of a zero-coupon bond that matures in 24 years if the market interest rate is 4.9 percent. Assume semiannual compounding. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Zero-coupon bond price

  • Problem 7-11 Zero-Coupon Bond Price (LG7-4) Calculate the price of a zero-coupon bond that matures in...

    Problem 7-11 Zero-Coupon Bond Price (LG7-4) Calculate the price of a zero-coupon bond that matures in 20 years if the market interest rate is 3.8 percent. Assume semiannual compounding. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Zero-coupon bond price At the beginning of the month, you owned $6,000 of News Corp. $5,000 of First Data, and $8,500 of Whirlpool. The monthly returns for News Corp. First Data, and Whirlpool were 8.24 percent, -2.59...

  • Calculate the price of a 5.4 percent coupon bond with 10 years left to maturity and...

    Calculate the price of a 5.4 percent coupon bond with 10 years left to maturity and a market interest rate of 5.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Bond price

  • PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a...

    PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.4034%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. 8.64 What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places.

  • Calculate the price of a zero-coupon bond that matures in 12 years if the market interest...

    Calculate the price of a zero-coupon bond that matures in 12 years if the market interest rate is 5.50 percent. Assume semiannual compunding.

  • Sunburn Sunscreen has a zero coupon bond Issue outstanding with a $25,000 face value that matures...

    Sunburn Sunscreen has a zero coupon bond Issue outstanding with a $25,000 face value that matures in one year. The current market value of the firm's assets is $26,100. The standard deviation of the return on the firm's assets is 41 percent per year, and the annual risk-free rate is 5 percent per year, compounded continuously. Frostbite Thermalwear has a zero coupon bond Issue outstanding with a face value of $37,000 that matures in one year. The current market value...

  • Sunburn Sunscreen has a zero coupon bond issue outstanding with a $15,000 face value that matures...

    Sunburn Sunscreen has a zero coupon bond issue outstanding with a $15,000 face value that matures in one year. The current market value of the firm’s assets is $16,400. The standard deviation of the return on the firm’s assets is 43 percent per year, and the annual risk-free rate is 6 percent per year, compounded continuously.    Frostbite Thermalwear has a zero coupon bond issue outstanding with a face value of $39,000 that matures in one year. The current market...

  • A 7% semiannual coupon bond matures in 5 years. The bond has a face value of...

    A 7% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 7.5026%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. $   What is the bond's YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answers to two decimal places.     %

  • Sunburn Sunscreen has a zero coupon bond issue outstanding with a $30,000 face value that matures...

    Sunburn Sunscreen has a zero coupon bond issue outstanding with a $30,000 face value that matures in one year. The current market value of the firm's assets is $31,800. The standard deviation of the return on the firm's assets is 36 percent per year, and the annual risk-free rate is 4 percent per year, compounded continuously. Frostbite Thermalwear has a zero coupon bond issue outstanding with a face value of $32,000 that matures in one year. The current market value...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT