You are purchasing a 14-year, zero-coupon bond. The yield to maturity is 5.94 percent and the face value is $1,000. What is the current market price? Assume semi-annual compounding.
A. $463.87
B. $382.80
C. $390.77
D. $440.66
current market price=Face value/(1+YTM/2)^(2*time period)
=$1000/(1+0.0594/2)^(2*14)
=$1000/(1.0297)^28
=$1000*0.440656361
=$440.66(Approx).
You are purchasing a 14-year, zero-coupon bond. The yield to maturity is 5.94 percent and the...
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