Question
In: Finance
A zero- coupon bond matures in 15 years. At a market discount rate of 4.5% per...
A zero- coupon bond matures in 15 years. At a market discount rate of 4.5% per year and assuming annual compounding, the price of the bond per 100 of par value is closest to
Group of answer choices
71.62
51.30
51.67
69.05
Solutions
Expert Solution
We are given the following information:
| Price of bond at time 0 | PV | To be calculated |
| rate of interest | r | 4.50% |
| number of years | n | 15 |
| Annual Compounding | frequency | 1 |
| Maturity or par value | FV | $ 100.00 |
We need to solve the following equation to arrive at the required FV
So the price is $51.67
jeff jeffy answered 2 years agoRelated Solutions
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