What is the present value (aka price) of a 26-year, pure discount bond (zero coupon bond) that

Fantastic news! We've Found the answer you've been seeking!

Question:

What is the present value (aka price) of a 26-year, pure discount bond (zero coupon bond) that pays $1100 at maturity if it is priced to yield 8.09% per year (YTM)? Answer to 2decimal places.

Related Book For answer-question

Intermediate Microeconomics

ISBN: 978-0393123968

9th edition

Authors: Hal R. Varian

Posted Date: May 09, 2024 07:40 AM

See More Questions

A 10-year, 7%, $100,000 bond is sold by Richardson Incorporated. The bond pays interest semi-annually. The market rate of interest for comparable bonds is 6%. At what price does the bond sell? Round...
You are planning to attend an master level Program that will require payment of $11,000 a year in tuition expenses at the end of each year for 2 years. Bonds currently yield 8.35%. a What is the...
Trish is entitled to severance pay.. Question 6 options: because Tasty Tarts payroll is greater than $2.5 million every 4 weeks because Trish has been employed for more than 5 years and Tasty Tarts...
A system consists of n identical components each of which will, independently, function with probability p. The system will be able to operate effectively if at least half of the components function....
Suppose that you are trying to choose which of two IT projects to accept. Your company employs three primary selection criteria for evaluating all IT projects: 1) proven technology, 2) ease of...
The biomass of 12 samples was measured, and the following values were obtained: (a) What is the estimate of the mean biomass? (b) What is the standard error of the estimate of the mean biomass? (c)...
Find the value at time 50 of the set of end-of-year cash flows shown, if the appropriate rate of return is 11 percent per year: a. $179,255 b. $1,255,000 c. $33,079,044 d. $6,106,191,094 Year(s) 1...
The partially completed inventory record for the record subassembly in Figure shows gross requirements, scheduled receipts, lead time, and current on-hand inventory. a. Complete the last three rows...
2. To determine the distance between two points on the coordinate plane, begin by connecting the two points. Then, draw a vertical line through one of the points and a horizontal line through the...
The properties of the timber cantilever beam ABC are I = 60 in.4 and E = 1.5 x 106 psi. Determine the displacement of the free end A. A 2 ft B 900 lb 200 lb/ft 6 ft- C
Gimble Manufacturing Inc. makes vibration control springs for heating, ventilating, and air conditioning (HVAC) equipment. Materials cost $52 per spring set, and the machinists are paid $44 per hour....
discuss the role of fault tree analysis (FTA) and event tree analysis (ETA) in identifying and evaluating potential points of failure in complex engineering systems, and how these tools contribute to...
How many dollars from your second monthly payment on your house mortgage of $162,000 at 4.35 percent for 20 years are applied to scheduled principal repayment?
For the function f(x)=2x-3, determine whether f(x) is one-to-one. If so, write an equation for the inverse function in the form y=f(x). Write an equation for the inverse function in the form y=f(x)....
Consider a 3-year bond with 13 percent semi-annual couponpayments and currently priced to yield 12 per cent per annum. Calculate duration of the bond. What is the percentage of price change if...
Confuso Inc. is a small company with two departments (Marketing and Sales). In order to take advantage of the growing global market, the company decided to setup a commercial website. For that,...
Identify the source of funds within Micro Credit? How does this differ from traditional sources of financing? What internal and external governance mechanisms are in place in Micro Credit?
Information contained in a profit and loss account and a balance sheet prepared under accrual accounting concepts is factual and objective. Discuss.
Jane Parker is going to set up a new business in Bruges on 1 January 20X1. She estimates that her first six months in business will be as follows: (i) She will put 150,000 into the firm on 1 January...
Explain the revenue recognition principle and discuss the effect of alternative treatments on the reported results of a company.

What is the present value (aka price) of a 26-year, pure discount bond (zero coupon bond) that

Question:

Expert Answer:

To calculate the present value price of a pure discount bond we can use the formula Price Face V... View the full answer

Intermediate Microeconomics

Students also viewed these finance questions