Question: 1. Mr. Wang received a zero-coupon bond with a face value of 100 and time to maturity of 5 years. How much is the bond

1. Mr. Wang received a zero-coupon bond with a face value of ￥100 and time to maturity of 5 years. How much is the bond worth now if the risk-adjusted market interest rate for the bond is 10%?

2. Ms. Zhou is considering whether to invest in a long-term fixed deposit. The fixed deposit account pays 9% interest annually. How long does Ms. Zhou need to wait to double the investment in the fixed deposit account? Hint: You can use the rule of 72

3. The APR (Annual Percentage Rate) on your savings account is 8% per year, compounding quarterly. How much will you have in your savings account at the end of the year, if you put ￥100 in the account now, at the beginning of the year?

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1 The value of a zerocoupon bond can be calculated using the following formula P F 1 rn Where P curr... View full answer

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