Question

Determine the interest payment for the following three bonds (Assume a $1,000 par value.) (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places):

4.90 percent coupon corporate bond (paid semiannually)	$
5.55 percent coupon Treasury note	$
Corporate zero coupon bond maturing in 15 years	$

Answer 1

4.90 percent coupon corporate bond (paid semiannually):

Par Value = $1000

Coupon rate(Annual) = 4.9%

Coupon rate(Semi Annual) = 2.45%(4.9%/2)

Interest payment = $1000 * 2.45%

=$24.50

4.90 percent coupon corporate bond (paid semiannually) = $24.50

5.55 % coupon Treasury note: Interest payment = $1000 * 5.55% * 1/2 = $27.75 5.55 % coupon Treasury note =$27.75 Corporate zero coupon bond maturing in 15 years Since Zero coupon bond has no interest payments, Interest payment = $0 Corporate zero coupon bond maturing in 15 years = $0