1 a 10-year 1000 par value zero-coupon rate bond is to be, Ask an Expert

Finance

1. A 10-year, $1,000 par value zero-coupon rate bond is to be issued to yield 9 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a. What should be the initial price of the bond? (Assume annual compounding. Do not round intermediate calculations and round your answer to 2 decimal places.)

bond price

b. If immediately upon issue, interest rates dropped to 8 percent, what would be the value of the zero-coupon rate bond? (Assume annual compounding. Do not round intermediate calculations and round your answer to 2 decimal places.)

c. If immediately upon issue, interest rates increased to 10 percent, what would be the value of the zero-coupon rate bond? (Assume annual compounding. Do not round intermediate calculations and round your answer to 2 decimal places.)

2. Assume a zero-coupon bond that sells for $320 will mature in 20 years at $1,800. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

What is the effective yield to maturity? (Assume annual compounding. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

yield to maturity %

View complete question

Financial Management, Finance

Category:- Financial Management
Reference No.:- M92431699

Have any Question?Write your Review or question?

Related Questions in Financial Management

Objectivedemonstrate the ability to perform financial

OBJECTIVE Demonstrate the ability to perform financial calculations and analysis related to the concepts covered in this course. PURPOSE The purpose of this project is to give you practical experi- ence with financial co ...

Lets end the capstone course with the followingthroughout

Let's end the capstone course with the following: Throughout the course, we've applied the Four Frames to the University of Missouri (A) case. Recognizing that all four frames are useful as a lens for evaluating organiza ...

Assignmentthe purpose of this assignment is to allow you

Assignment The purpose of this assignment is to allow you the chance to evaluate the role of social responsibility in society. After you complete this assignment, you will analyze a written article, be able to ascertain ...

Project risk finance and monitoring assignment -

Project risk, finance, and monitoring Assignment - Report Assessment Description - In this assessment in Part A students are asked to imagine they have been engaged by an external client to develop a report on key aspect ...

Read through the tree trimming project case in chapter 13

Read through the Tree Trimming Project case in chapter 13 of the textbook. This case refers to the earned value (EV) of the owner, Will Fence's Tree Trimming business. Will briefly describes his techniques for EV. Based ...

Assignment problems1 on the day harry was born his parents

Assignment Problems 1. On the day Harry was born, his parents put $1600 into an investment account that promises to pay a fixed interest rate of 5 percent per year. How much money will Harry have in this account when he ...

You will be conducting an interview with a market research

You will be conducting an interview with a market research professional or a company representative. Use the results of your research to make specific recommendations on how market research can be applied to the Marketpl ...

Homework chapter 7 - interest rates amp bond valuations1

Homework Chapter 7 - Interest Rates & Bond Valuations 1) Julie just received her annual payment of $80 on a bond she owns. Which of the following refers to this payment? A) Call premium. B) Coupon. C) Yield. D) Discount. ...

Based on this weeks reading determine five 5 leadership

Based on this week's reading, determine five (5) leadership characteristics of effective public leadership and ascribe them to transactional and transformational styles of leadership. What is the difference in the applic ...

Unit 3 dbthe president of eec recently called a meeting to

Unit 3 DB The President of EEC recently called a meeting to announce that one of the firm's largest suppliers of component parts has approached EEC about a possible purchase of the supplier. The President has requested t ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Financial Management Expert