a. What is the value of a 10-year zero coupon bond with a face value of $1,000

Question:

a. What is the value of a 10-year zero bond with a of $1,000 when the market rate is 8 percent.
b. Calculate the YTM of the above zero bond if the current price is $760.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...