Question: 1. Consider a zero-coupon bond with $1,000 face value and 20years to maturity. The price of this bond if the current YTM is 5.3% is

1. Consider a zero-coupon bond with $1,000 face value and 20years to maturity. The price of this bond if the current YTM is 5.3% is closest to:

A.$569.58

B.$355.99

C.$427.18

D..$498.38

2. The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 10years. The bond certificate indicates that the stated coupon rate for this bond is 8.8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 7.4%, then the price that this bond trades for will be closest to:

A.$6,586

B.$4,391

C.$5,489

D.$7,648

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Mr Leong aged 53, is the factory manager of Best Electronics Sdn Bhd which manufactures electronic components for export to its holding company in the USA. He has been working with Best Electronics...

Consider a zero-coupon bond with $1,000 face value and 20 years to maturity. The price will this bond trade if the YTM is 5.3% is closest to: O A. $569.58 B. $355.99 OC. $498.38 OD. $427.18

Period 0 1 2 3 119 120 $18.3 $18.3 $18.3 $18.3 $18.3 + $5,000 A corporation issues a bond that generates the above cash flows. If the periods shown are 1 month, which of the following best describes...

Can anyone please answer these questions? 1) 1) Five years ago you took out a 30-year mortgage with an APR of 6.40% for $196,000. If you were to refinance the mortgage today for 20 years at an APR of...

I need help solving question number 1. 1) Five years ago you took out a 30-year mortgage with an APR of 6.10% for $208,000. If you were to refinance the mortgage today for 20 years at an APR of...

I need help answering question number 3 1) 1) Five years ago you took out a 30- year mortgage with an APR of 6.10% for $208,000. If you were to refinance the mortgage today for 20 years at an APR of...

QUESTION 1 "A coupon bond that pays interest annually has a par value of $1000, matures in 6 years, and has a yield to maturity of 6%. If the coupon rate is 15%, the value of the bond today will be...

A coupon bond that pays interest annually has a par value of $1000, matures in 6 years, and has a yield to maturity of 6%. If the coupon rate is 15%, the value of the bond today will be __________....

i am taking Cooperate finance which is FIN222 can help me to answer.. ? Tutorial 1 Topic 1 Chapter 1 4. What are the main advantages and disadvantages of organising a firm as a corporation? 6. You...

1- The MM Company has a bond outstanding with a face value of $1000 that reaches maturity in 5 years. The bond certificate indicates that the stated coupon rate for this bond is 10% and that the...

A swimming pool has a volume of 40,751 cubic feet. How many gallons of water does the pool hold? 2 pints (pt) 4 quarts 1 gallon 1 cup (c) Volume in Cubic Units 1 cubic yard 1 cubic foot 231 cubic...

When someone is sick, the patients decision to take an antibiotic imposes costs on othersit helps bacteria evolve resistance faster. But it also gives free benefits to others: It may slow down the...

Weismann Company issued 1 0 - year bonds a year ago at a coupon rate of 1 2 percent. The bonds make semiannual payments and have a par value of $ 1 , 0 0 0 . If the YTM on these bonds is 1 1 percent,...

Calculate the depreciation in dollar and percentage terms, the yearly depreciation in percentage terms, and the percentage residual value based on the figures provided below. Round each answer to 2...