A 5-year, $1,000 par value, zero-coupon rate bond is to be issued to yield 10%. a. What
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A 5-year, $1,000 par value, zero-coupon rate bond is to be issued to yield 10%.
a. What should be the initial price of the bond?
b. If immediately upon issue, interest rates dropped to 8%, what would be the value of the zero-coupon rate bond?
c. If immediately upon issue, interest rates increased to 12%, what would be the value of the zero-coupon rate bond?
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AComputation of the initial price of the bond Given information Bond Value 1000 Coupon Amount ...View the full answer
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Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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