Question
In: Finance
You find a zero coupon bond with a par value of $10,000 and 20 years to maturity. The yield to maturity on this bond is...
You find a zero coupon bond with a par value of $10,000 and 20 years to maturity. The yield to maturity on this bond is 4.2 percent. Assume semiannual compounding periods. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Solutions
Expert Solution
Price of bond=Par value/(1+YTM/2)^(2*time period)
=$10,000/(1+0.042/2)^(2*20)
=$10,000/(1.021)^40
=$10,000*0.435482108
=$4354.82(Approx).
jeff jeffy answered 2 years agoRelated Solutions
You find a zero coupon bond with a par value of $10,000 and 23 years to...
You find a zero coupon bond with a par value of $10,000 and 23
years to maturity. The yield to maturity on this bond is 4.5
percent. Assume semiannual compounding periods.
What is the price of the bond? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
1. You find a zero coupon bond with a par value of $10,000 and 17 years...
1. You find a zero coupon bond with a par value of $10,000 and
17 years to maturity. If the yield to maturity on this bond is 4.2
percent, what is the price of the bond? Assume semiannual
compounding periods. (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
2. Union Local School District has a bond outstanding with a
coupon rate of 2.8 percent paid semiannually and 16 years to
maturity. The yield...
Suppose you purchase a 30-year, SEK 10,000 par value, zero-coupon bond with a yield to maturity...
Suppose you purchase a 30-year, SEK 10,000 par value,
zero-coupon bond with a yield to maturity (YTM) of 4.2%. You hold
the bond for 5 years before selling it.
(a) What is the price of the bond when you buy it?
Answer: The price of the bond is SEK .
(round to full SEK)
(b) If the bond’s yield to maturity drops by 1% when you sell it,
what is the internal rate of return of your investment?
Answer: If...
Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A...
Consider the following $1,000 par value zero-coupon
bonds:
Bond
Years until
Maturity
Yield to Maturity
A
1
7.25
%
B
2
8.25
C
3
8.75
D
4
9.25
a. According to the expectations hypothesis, what
is the market’s expectation of the one-year interest rate three
years from now? (Do not round intermediate
calculations. Round your answer to 2
decimal places.)
b. What are the expected values of next year’s
yields on bonds with maturities of (a) 1 year; (b) 2...
Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A...
Consider the following $1,000 par value zero-coupon bonds:
Bond
Years until
Maturity
Yield to Maturity
A
1
8.50
%
B
2
9.50
C
3
10.00
D
4
10.50
a. According to the expectations hypothesis, what
is the market’s expectation of the one-year interest rate three
years from now? (Do not round intermediate
calculations. Round your answer to 2
decimal places.)
b. What are the expected values of next year’s
yields on bonds with maturities of (a) 1 year; (b) 2...
Find the yield to maturity of a par $10,000 bond selling at $9,800 with semiannual coupon...
Find the yield to maturity of a par $10,000 bond selling at
$9,800 with semiannual coupon payments equal to $280 and maturing
in 8years. State the formula and substitute the figures in to the
formula to derive the correct answer if possible?
A zero-coupon bond has a yield to maturity of 9% and a par value of $1,000....
A zero-coupon bond has a yield to maturity of 9% and a par value
of $1,000. By convention, zero bonds are assumed to pay $0
semi-annually. If the bond matures in eight years, the bond should
sell for a price of _______ today.v.
A zero-coupon bond has a par value of $1,000 and a yield-to-maturity of 5%. You purchase...
A zero-coupon bond has a par value of $1,000 and a
yield-to-maturity of 5%. You purchase the bond when it has exactly
17 years remaining until maturity. You hold the bond for 6 months
and then sell it. If the bond's yield-to-maturity is 9% when you
sell it, what is your percentage return over this 6-month holding
period? When computing bond prices, use a semi-annual compounding
period. Enter your answer as a decimal and show 4 decimal places.
For example,...
You find a zero coupon bond with a par value of $25,000 and 18 years to...
You find a zero coupon bond with a par value of $25,000 and 18
years to maturity.
If the yield to maturity on this bond is 3.9 percent, what is
the dollar price of the bond? Assume semiannual compounding
periods.
What is the bond price?
You find a zero coupon bond which is a poor value of $10,000 and 12 years...
You
find a zero coupon bond which is a poor value of $10,000 and 12
years to maturity on this bond is 4.9% assuming that is the semi
annual compound what is the price worth of this bond how do I
go
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Suppose Rialto is the only movie cinema in a small college town, so it is essentially...
- With VMI, members of the supply chain share planning, demand, forecasting, and inventory information.
- Large lots are desirable in supply chain coordination despite increasing holding costs.
- ***Convert the C++ to Python*** #include <iostream> using std::cout; using std::cin; using std::endl; int charClass; char...
- Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a...
- The following costs were incurred for the single product produced during the first year of operations...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
ADVERTISEMENT