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A newly issued 20-year maturity, zero-coupon bond is issued with a yield to maturity of 8% and face value $1,000.

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A newly issued 20-year maturity, zero-coupon bond is issued with a yield to maturity of 8% and face value $1,000. Find the imputed interest income in the first, second, and last year of the bond’s life.


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... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...

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Investments

Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: January 04, 2013 07:55:35
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Related Video

The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel

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