A. You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in ninety-four days. If you desire a return of 2.75%, how much would you bid for the bond today? (Round your answer to two decimal place, e.g. 9,274.36)
B. Suppose that you decided to purchase the bond described above for the calculated price. Now assume that immediately after you purchased the bond, the rate rises by 20 Basis Points. What will now be the price of the bond after this rise in rates? (Round your answer to two decimal place, e.g. 9,274.36)
a]
Price of discount bond = face value / (1 + required return)n/3650, where n = days until maturity.
Price of discount bond = $10,000 / (1 + 2.75%)94/365
Price of discount bond = $9,930.38.
b]
Price of discount bond = $10,000 / (1 + 2.95%)94/365
Price of discount bond = $9,925.41
A. You are considering the purchase of a Pure Discount Bond with a Face Value of...
Finance, You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in three years. If you desire a return of 3.35%, how much would you bid for the bond today? (Round your answer to two decimal places, e.g. 9274.36) It's not 9058.76 nor 9051.38, really need help with this question can anyone tell me what am I doing wrong.
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