A bond will pay a coupon of $100 at the end of each of the next...

A bond will pay a coupon of $100 at the end of each of the next 3 years and will pay the $1,000 face value at the end of the 3-year period.

What is the bond's (Macaulay) duration when valued using an annual effective interest rate of 20%?

Solutions

Expert Solution

To solve this problem our approach will be as follows;

Colby Messinger answered 1 year ago

Next > < Previous

Related Solutions

An investment will pay $100 at the end of each of the next 3years, $200...

An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 6% annually, what its future value? Do not round intermediate calculations. Round your answers to the nearest cent.

A) An investment will pay $100 at the end of each of the next 3 years,...

A) An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of equal risk earn 5% annually, what is its present value? Round your answer to the nearest cent. B) What is its future value? Round your answer to the nearest cent.

An investment will pay $100 at the end of each of the next 3 years, $250...

An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $600 at the end of Year 6. If other investments of equal risk earn 6% annually, what is its present value? Round your answer to the nearest cent. $ If other investments of equal risk earn 6% annually, what is its future value? Round your answer to the nearest cent.

1. An investment will pay $100 at the end of each of the next 3 years,...

1. An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 12% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. 2.You want to buy a car, and a local bank will lend you...

Investment will pay $100 at the end of each of the next 3 years 200 at...

Investment will pay $100 at the end of each of the next 3 years 200 at the end of year 4 350 at the end of yearr 5 and 550 at the end of year 6 if other investments of equal risk earn 4% annually what is its present value Round your answer to the nearest cents.

An investment will pay you $100 at the end of each of the next 3 years,...

An investment will pay you $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If the investment earns 8% annually, what is its future value?

An investment will pay $100 at the end of each of the next 3 years, $250...

An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $350 at the end of Year 5, and $550 at the end of Year 6. 1. If other investments of equal risk earn 10% annually, what is its present value? Round your answer to the nearest cent. 2. If other investments of equal risk earn 10% annually, what is its future value? Round your answer to the nearest...

1. An investment will pay $100 at the end of each of the next 3 years,...

1. An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 12% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. 2. You want to buy a car, and a local bank will lend...

You are considering purchasing a bond. The bond will pay you $100 at the end of...

You are considering purchasing a bond. The bond will pay you $100 at the end of each year for three years. At the end of the third year, the bond will also pay you back its $1,000 face value. Assuming a 10% discount rate, how much is this bond worth today? Round to the nearest dollar

An investment will pay $10 at the end of each of the next 3 years, $40...

An investment will pay $10 at the end of each of the next 3 years, $40 at the end of Year 4, $50 at the end of Year 5, and $60 at the end of Year 6. If other investments of equal risk earn 8% annually, what is this investment’s future value?

Subjects