Question

You are purchasing a 30-year, zero-coupon bond. The yield to maturity is 8.68 percent and the face value is $1,000. What is the current market price?

Answer #1

Current price = $82.32

--------------------------------------------------------------------------------------------------------------------------

Zero coupon bond pays no coupon.

PV of bond = Face vale/(1 + required rate)^years to maturity

Let's put all the values in the formula

= 1000/ (1 + 0.0868)^30

= 1000/ (1.0868)^30

= 1000/ 12.1476

= $82.32

--------------------------------------------------------------------------------------------------------------------------

*Feel free to comment if you need further
assistance**J*

*Pls rate this answer if you found it
useful.*

You are purchasing a 25-year, zero-coupon bond from Gem, Inc.
The yield to maturity is 8.68% and the face value is $1,000. What
is the current market price?
PLEASE TRY TO BE A SIMPLE AS POSSIBLE, preferably using
excel!

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.

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...

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 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?

The yield-to-maturity (YTM) on one-year bond with zero coupon
and face value $ 1000 is 5 %. The YTM on two-year bond with 5 %
coupon paid annually and face value $ 1000 is 6 %. (i) What are the
current prices of these bonds? (ii) Find Macaulay durations of
these bonds. Consider a third bond which is a zero coupon two-year
bond with face value $ 1000. (iii) What must be the price of the
third bond so that...

You purchase a zero coupon bond with 22 years to maturity and a
yield to maturity of 5.49 percent. The bond has a par value of
$1,000. What is the implicit interest for the first year? Assume
semiannual compounding

Company A offers a zero coupon bond with a yield to maturity of
25 percent. The bond matures in 1 years and has a face value of
$1,000. What is this bond worth today? Assume annual
compounding.
A) $1000
B) $800
C) $1250
D) $1562.5
E) $640

You purchase a zero coupon bond with 21 years to maturity and a
yield to maturity of 5.53 percent. The bond has a par value of
$1,000. What is the implicit interest for the first year? Assume
semiannual compounding.
$17.24
$17.39
$17.83
$15.60
$17.12

Rex Healthcare recently issued a bond with a 30-year maturity,
an annual coupon rate of 10 percent, a face value of $1,000, and
semiannual interest payments. If the current rate of interest is a
9 percent yield to maturity on this investment, what is the current
price of the bond?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 45 seconds ago

asked 45 seconds ago

asked 45 seconds ago

asked 45 seconds ago

asked 1 minute ago

asked 1 minute ago

asked 1 minute ago

asked 4 minutes ago

asked 5 minutes ago

asked 7 minutes ago

asked 8 minutes ago

asked 8 minutes ago