A zero coupon bond with a face value of $20,000 matures in 10 years What should the bond be sold for now if its rate of return is to be 4 194 compounded annually Refer to zero coupon bonds A zero coupon bond is a bond that is sold now at a discount and will pay its face value at some time in the future when it matures no interest payments are made

Question: A zero coupon bond with a face value of $20,000 matures in 10 years. What should the bond be sold for now if its rate

A zero bond with a of $20,000 matures in 10 years. What should the bond be sold for now if its rate of return is to be 4.194% compounded annually?
Refer to zero bonds. A zero bond is a bond that is sold now at a discount and will pay its at some time in the future when it matures no interest payments are made.

Step by Step Solution

★★★★★

3.31 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

A 20000 m 1 t 10 year... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

828-B-F-F-M (3551).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!

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

Suppose that a one- year zero- coupon bond with a face value of $ 100 currently sells at $ 94.34, while a two- year zero sells at $ 84.99. You are considering the purchase of a two- year- maturity...

Portfolio A consists of a one-year zero-coupon bond with a face value of $2,000 and a 10-year zero-coupon bond with a face value of $6,000. Portfolio B consists of a 5.95-year zero-coupon bond with a...

A zero coupon bond has a face value of $1,000 and matures in 4 years. Investors require a(n) 7% annual return on these bonds What should be the selling price of the bond? The price of the bond is...

A zero coupon bond has a face value of $1,000 and matures in 4 years. Investors require a(n) 7.7% annual return on these bonds. What should be the selling price of the bond?

A firm offers a zero coupon bond with a face value of $1,000 that matures in 10 years. What is the current market price if the yield to maturity is 7.6 percent, given semiannual compounding? O a....

Please help A firm offers a zero coupon bond with a face value of $1,000 that matures in 10 years. What is the current market price if the yield to maturity is 9 percent, givenannual compounding?...

What would be the highest price you should be willing to pay for a zero coupon bond with a face value of $989 that matures in 15 years if the appropriate discount rate for this security equals to...

Question 5 15 pts What would be the highest price you should be willing to pay for a zero coupon bond with a face value of $4,377 that matures in 16 years if the appropriate discount rate for this...

D Question 35 3 pts What would be the highest price you should be willing to pay for a zero coupon bond with a face value of $4,370 that matures in 16 years if the appropriate discount rate for this...

On June 1, 2019, Norm leases a taxi and places it in service. The lease payments are $1,000 per month. Assuming the dollar amount from the IRS table for such leases is $241, determine Norm's gross...

Which type of personality are you as per Myers-Briggs Type Indicator. Proof using your personal examples.

You invest $ 5 0 0 , 0 0 0 now, intending to withdraw $ 8 0 , 0 0 0 annually, starting next year, for 1 0 years. What interest rate is needed to achieve this? Give in percent format and round to 2...

If b and w stand for the results of a throw of two dice, show that the events A = {b + w

In Problem use the four-step process to find f'(x) and then find f' (1), f' (2), and f' (3). f(x) = -x 2 + 5x + 1

In Problem find each limit if it exists. lim 4x

In Problem find all partition numbers of the function. + 4x f(x) x + 6x

An IBM bond pays 7% interest, and a Florida State bonds pays 5%. If you are in a 40% tax bracket, which should you purchase? ( Assume that the level of risk is the same for both bonds.)

You own a portfolio consisting of the following stocks: Percentage of Portfolio, Beta, Expected Return 1. 5% 1.20 14%, 2. 25 0.65, 10, 3. 15 1.00 12, 4. 20 1.4 16, 5. 35 0.90 11. The risk-free rate...

1. A law firm plans to invest in a small business computer system. The initial investment is $35,000. The firms tax rate is 40%. The computer system should provide additional revenue of $25,000 per...