Question

What is the price of a 10-year zero-coupon bond when the annual yield to maturity is...

What is the price of a 10-year zero-coupon bond when the annual yield to maturity is 8% and the bond has a face value of $1 million?

Group of answer choices

$675,564

$1,000,000

$583,653

$456,387

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Working: -

PLEASE UPVOTE FOR THE SOLUTION

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
1. A 9-year zero coupon bond has a yield to maturity of 11.8 percent, and a...
1. A 9-year zero coupon bond has a yield to maturity of 11.8 percent, and a par value of $1,000.  What is the price of the bond? 2. A 7-year bond has a 8 percent coupon rate with the interest paid in semi annual payments.  The yield to maturity of the bond is 2.3 percent, and a face value of $1,000.  What is the price of the bond? 3. A 12-year bond has a 9 percent annual coupon, a yield to maturity of...
You are purchasing a 20-year, zero-coupon bond. The annual yield to maturity is 9.80 percent and...
You are purchasing a 20-year, zero-coupon bond. The annual yield to maturity is 9.80 percent and the face value is $1,000. What is the current market price? Assume (r) is bi-annual for compounding purposes in case of zero-coupon bond.
a 10 year zero coupon bond with a yield to maturity of 5% has a face...
a 10 year zero coupon bond with a yield to maturity of 5% has a face value of $1000. An investor purchases this bond when it is initially traded, and then sells it five years later. What is the rate of return of this investment, assuming the yield to maturity does not change? Answers say 4.01% can someone please explain this and show their working? Thank you.
1.A 12-year bond has a 9 percent annual coupon, a yield to maturity of 11.4 percent,...
1.A 12-year bond has a 9 percent annual coupon, a yield to maturity of 11.4 percent, and a face value of $1,000. What is the price of the bond? 2.You just purchased a $1,000 par value, 9-year, 7 percent annual coupon bond that pays interest on a semiannual basis. The bond sells for $920. What is the bond’s nominal yield to maturity? a.         7.28% b.         8.28% c.         9.60% d.         8.67% e.         4.13% f.          None of the above 3.A bond with...
You bought a 10-year zero-coupon bond with a face value of $1,000 and a yield to...
You bought a 10-year zero-coupon bond with a face value of $1,000 and a yield to maturity of 2.7% (EAR). You keep the bond for 5 years before selling it. The price of the bond today is P 0 = F ( 1 + r ) T = 1,000 1.027 10 = 766.12 If the yield to maturity is still 2.7% when you sell the bond at the end of year-5, what is your personal ANNUAL rate of return?
What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face...
What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $9,350 when released?
What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face...
What is the yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $9400 when released?
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...
1. A 3-year annual coupon bond has a yield to maturity of 8%, coupon rate of...
1. A 3-year annual coupon bond has a yield to maturity of 8%, coupon rate of 5%. The face value of the bond is $1,000. a. What is the price of the bond? Is it premium bond or discount bond? b. Suppose one year later immediately after you receive the first coupon payment, the yield to maturity drops to 7%. What would be your holding period return if you decide to sell the bond at the market price then? c....
You buy an 8 percent coupon, 10-year maturity bond when its yield to maturity is 9...
You buy an 8 percent coupon, 10-year maturity bond when its yield to maturity is 9 percent. One year later, the yield to maturity is 10 percent. Assume the face value of the bond is $1,000. (a) What is the price of the bond today? (b) What is the price of the bond one year later? (c) What is your rate of return over the one-year holding period?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT