Question

Today’s value of a Zero Coupon Bond Par = $1000 Time to Maturity = 20 years...

Today’s value of a Zero Coupon Bond

Par = $1000

Time to Maturity = 20 years

Interest Rate = 3%, 5%, & 7%

What will be the value at 7%?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Value of the Zero Coupon Bond at 7% = $508.35

Value of the Bond can be calculated using the PV function in excel

Its arguments are Interest rate, Year to Maturity, Coupon Amount and Face Value

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is the price of a $1000 face value zero-coupon bond with 4 years to maturity...
What is the price of a $1000 face value zero-coupon bond with 4 years to maturity if the required return on these bonds is 3%? Consider a bond with par value of $1000, 25 years left to maturity, and a coupon rate of 6.4% paid annually. If the yield to maturity on these bonds is 7.5%, what is the current bond price? One year ago, your firm issued 14-year bonds with a coupon rate of 6.9%. The bonds make semiannual...
A $1000 par value bond with 3 years to maturity has a coupon rate of 6%...
A $1000 par value bond with 3 years to maturity has a coupon rate of 6% pa paid annually. compute the bond price if the interest rate (compounded semi annually) are 7%, 8% and 9% respectively for year 1, 2 and 3.
Consider an annual coupon bond with a $1000 par value and 5 years to maturity. The...
Consider an annual coupon bond with a $1000 par value and 5 years to maturity. The yield to maturity is 8% and the coupon rate is 10%. If the yield to maturity is held constant, which of the following can be inferred about this bond? this bond is selling at a premium and the price will increase with time this bond is selling at a discount and the price will increase with time this bond is selling at a discount...
A bond has a par value of $1000, a time to maturity of 12 years and...
A bond has a par value of $1000, a time to maturity of 12 years and a coupon rate of 6% with interest paid annually. If the current market price is $925, what will be the approximate capital gain yield of this bond over the next year if its yield to maturity remains unchanged? Answer in percentages with two decimal places
Consider an annual coupon bond with a $1000 par value and 5 years to maturity. The...
Consider an annual coupon bond with a $1000 par value and 5 years to maturity. The yield to maturity is 13% and the coupon rate is 10%. If the yield to maturity is held constant, which of the following can be inferred about this bond? a this bond is selling at a premium and the price will increase with time b this bond is selling at a premium and the price will decrease with time c this bond is selling...
Bond A has 2 years to maturity, 5% coupon rate, 5% YTM, $1000 par value, and...
Bond A has 2 years to maturity, 5% coupon rate, 5% YTM, $1000 par value, and semiannual coupons. Bond B has 10 years to maturity, 5% coupon rate, 5% YTM, $1000 par value, and semiannual coupons. Bond C has 10 years to maturity, 4% coupon rate, 5% YTM, $1000 par value, and semiannual coupons. Which comparison is TRUE? A. Bond A has higher price sensitivity than Bond B B. Bond C has higher price sensitivity than Bond A C. Bond...
ABC Company is issuing a new bond with a par value of $1000 and a coupon...
ABC Company is issuing a new bond with a par value of $1000 and a coupon rate of 7%. The time to maturity is 16 years and the Yield to Maturity is 4.15%. If coupon payments are semi-annual, what is today's price of this bond?
compute the value of 1,000 par value zero coupon bond with 15 years to maturity given...
compute the value of 1,000 par value zero coupon bond with 15 years to maturity given a 7% market rate of return. a) 1,000 b) 362.45 c) 315.24 d) 239.39
A. A bond has a par value of $1,000, a time to maturity of 20 years,...
A. A bond has a par value of $1,000, a time to maturity of 20 years, and a coupon rate of 7.50% with interest paid annually. If the current market price is $750, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.) B. Suppose that today’s date is April 15. A bond with a 8% coupon...
A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid annually....
A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid annually. What is the value of the bond if your required rate of return is 5%? 2. A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid semi-annually. What is the value of the bond if your required rate of return is 5%? 3.  A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid semi-annually. What...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT