A zero coupon bond has a par value of $1,000 and will mature in eight years. a.
Question:
a. Calculate the current price of this bond if the market yield is:
i) 7.75 percent
ii) 5.25 percent
b. In each case, calculate the percentage change in the price of the bond if the market yields rises by 1 percent.
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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Using a financial calculator a N 16 IY 3875 PMT 0 FV 1000 CPT PV 54428 If the market yield incr...View the full answer
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Related Book For 
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
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