Question
In: Finance
A zero coupon has a face value of $1000 and matures in 4 years. Investors require...
A zero coupon has a face value of $1000 and matures in 4 years. Investors require a 6.8% annual return on these bonds. What should be the selling price of the bond
Solutions
Expert Solution
The selling price of the bond can be calculated as the present value of the bond
PV of bond = Face value / (1 + Rate)^N
= 1000 / (1 + 6.80%)^4
= 768.63
jeff jeffy answered 2 years agoRelated Solutions
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