ZuoTi.Pro
Question

FINC 3310 Assume today is Jan 1, 2016, a 0 coupon bond is priced with a...

FINC 3310

Assume today is Jan 1, 2016, a 0 coupon bond is priced with a yield to maturity of 4%. The face value is 1,000 and it matures in 6 years. Calculate the current price of the bond.

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

Homework Answers

Answer #1

Bond price: = $1,000/(1+4%)^6 = $1,000/1.265319 = $790.31 Hence, Bond price is $790.31 *Please rate thumbs up

*Please rate thumbs up

0 0
Add a comment
Know the answer?
Add Answer to:
FINC 3310 Assume today is Jan 1, 2016, a 0 coupon bond is priced with a...
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

  • formula + answer please 1. The $1,000 face value ABC bond has a coupon rate of...

    formula + answer please 1. The $1,000 face value ABC bond has a coupon rate of 6%, with interest paid semi-annually, and matures in 5 years. If the bond is priced to yield 8%, what is the bond's value today? (5 PTS) 2. The KLM bond has $80 yearly coupon (with interest paid quarterly), a maturity value of $1,000, and matures in 20 years. If the bond is priced to yield 6%, what is the maximum price a which you...

  • An 8 percent semiannual coupon bond is priced at $1,204.60. The bond has a $1,000 face...

    An 8 percent semiannual coupon bond is priced at $1,204.60. The bond has a $1,000 face value and a yield to maturity of 4.88 percent. How many years will it be until this bond matures?

  • 1. a corperate bond matures in 3 years. the bond has an 8% semiannual coupon and...

    1. a corperate bond matures in 3 years. the bond has an 8% semiannual coupon and the par value is 1000. the bond is callable in 2 years at a call price of $1050. the price of the bond today is $1075. what is the bonds yield to call? 2. midea cooperation bonds mature in 3 years and have a yield to maturity of 8.5%. the par value is 1000. the bond has a 10% coupon rate and pay interest...

  • 1)A Ford Motor Co. coupon bond has a coupon rate of 7​%, and pays annual coupons....

    1)A Ford Motor Co. coupon bond has a coupon rate of 7​%, and pays annual coupons. The next coupon is due tomorrow and the bond matures 40 years from tomorrow. The yield on the bond issue is 6.15​%. At what price should this bond trade​ today, assuming a face value of ​$1,000​? The price of the bond today should be ​$ 2) If the nominal rate of interest is 13.07% and the real rate of interest is 7.09 % what...

  • BOND VALUATION An investor has two bonds in her portfolio, Bond C and Bond Z. Each...

    BOND VALUATION An investor has two bonds in her portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 9 6%. Bond C pays a 10% annual coupon, while Bond Z is a zero coupon bond. a. Assuming that the yield to maturity of each bond remains at 9 6% over the next 4 years, calculate the price of the bonds at each of the...

  • d. Assume that you have a one-year coupon bond with a face value of $1,000 and...

    d. Assume that you have a one-year coupon bond with a face value of $1,000 and a coupon payment of $50. What is the price of the bond if the yield to maturity is 6%? e. Assume that you have the same bond is in part d, except instead of paying one annual payment of $50, the bond pays two semi-annual payments of $25 (one six months from now and another payment in twelve months). What is the price of...

  • 18. The $1,000 face value ABC bond has a coupon rate of 6%, with interest paid...

    18. The $1,000 face value ABC bond has a coupon rate of 6%, with interest paid annually, and matures in 3 years. If the bond is priced to yield 4%, what is the bond&#39;s value today? A. $984.54 B. $989.64 C. $997.27 D. $1,055.50

  • A coupon bond with a face value of ​$1200 that pays an annual coupon of ​$400...

    A coupon bond with a face value of ​$1200 that pays an annual coupon of ​$400 has a coupon rate equal to ? What is the approximate​ (closest whole​ number) yield to maturity on a coupon bond that matures one year from​ today, has a par value of $1010, pays an annual coupon of $75, and whose price today is $1004.50? A. 7% B. 4% C. 8% D 6% E. 5% If the yield to maturity on a bond exceeds...

  • 4. If a $1,000 bond pays no coupon interest, matures in 8 years and is priced...

    4. If a $1,000 bond pays no coupon interest, matures in 8 years and is priced to yield 6.6%, what is the price of the bond?

  • WORTH 1 MARK 1. A corporation bond has the face value of $1,000, the coupon rate...

    WORTH 1 MARK 1. A corporation bond has the face value of $1,000, the coupon rate of 6% per annum and the remaining term-to-maturity of 10 years. Coupon interest on the bond will be paid semi- annually. The current yield-to-maturity of the bond is 5% per annum. Find the current price of the bond. Secondly, assume that the investor will buy this bond today and will hold the bond for the next 6 months. At the end of the next...

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